Network Design in the Supply Chain - Models for facility location and capacity allocation
3 important questions on Network Design in the Supply Chain - Models for facility location and capacity allocation
What kind of models do we use in Phase 2: Regional facility configuration?
Network optimization models. A manager considers regional demand, tariffs, economies of scale and aggregate factor costs to decide the regions where facilities should be located.
What kind of models do we use in Phase 3: Selection of set of desirable potential sites?
Gravity Location Models, used to find locations that minimize the cost of transporting raw materials from suppliers and finished goods to the markets served. Used when needed to find suitable geographic locations for sites.
What kind of models do we use in Phase 4: Location Choices?
We use again Network Optimization Models, but now on a lower scale. Also allocating demands do each plant and dividing markets.
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