Supply Chain Management

1599 WordsJul 16, 20137 Pages
Supply Chain Management Network Design and Facility Location Classical Theories von Thunen Agricultural activity occurs in a “limitless plain of equal fertility” with a city in the middle Theorized that: City price = origin price + transport costs Transport costs = f {weight & distance} As a result Products having high weight/value ratio should be produced near the city (see next slide) Other Contributions Land values decrease as move from city More intense land utilization near cities Weber Classification of Materials as: Localized vs. Ubiquitous (available everywhere) Pure vs. Weight-Losing How does a raw material’s status as pure, weight-losing, or weight-gaining influence the facility location decision? A pure…show more content…
Percent Service Level Within Promised Time Facilities Inventory Transportation Labor Number of Facilities Organizations should be thinking about the optimal number of facilities in the system. The need for additional facilities often arises when an organization’s service performance from existing facilities drops below “acceptable” levels. The general trend in recent years has been for companies to reduce the number of facilities in their distribution networks. Cost of Operations Network Design and Facility Location Reasons for Location Decision Steps in the Location Decision Location Determinants Location Evaluation Methods Strategic Location of Facilities Types of Location Decisions – Suppliers – Manufacturing – Distribution – Customers Reasons for the Location Decision – New Markets / New Products – Facility Modernization – Shifts in Economic Conditions – Competitive Pressures – Global Issues – Increased Customer Service Requirements 6
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