Facility Decisions: Network Design in the Supply Chain - Review Notes

  Supply chain facilities are manufacturing, storage and transportation-related facities. We may need to think of adding information processing facilities also to them to have a wider view of the facilites used in supply chains. Location of these facilities, capacity of these facilities, capacity allocated to them in an period and role given to them etc. are facility related supply chain decisions. Facility decisions are referred to as supply chain network decision decisions.

Decision regarding role become important in providing flexibility. If facilities can serve demand in a region globally there is more flexibility. Similarly in a multi-product firm, if facilities can produce large number of products, there is flexibility.

Factors Influencing Facility Decisions

Strategic Focus of the Company

Technological Factors

Economic Incentives

Political Factors



A Framework for Network Design Decisions

Phase I  Developing Supply Chain Strategy

Phase II. Regional Level Decisions

Phase III. Selecting Desirable Sites in Each Region

Phase IV. Choice of Location

Models for Facility Location and Capacity Allocation

Gravity Location Models

Network Optimization Modesl

Uncertainty and Network Design

Updated 21.2.2012
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