Supply Chain Management

Supplier->plants->warehouses D.C->Retailer

Supplier->Plants->Warehoues D.C (1)->Warehouse D.C (2)->Retailer


1st tier vs 2nd tier
Central warehouse and Scattered warehouse

Three Hierarchical Step
1)Network Design: number, location, size of plant & warehouse, allocating space,
Objective & Trade Off
Objective: Design or reconfigure the logistic network in order to minimize annual system-wide cost object to a variety of service level requirement.

Increase # of warehouse typically yields:
+ service level due to reduce travel time to customer
+ cost cuz more safety stock against uncertainties of demand
+ overhead & setup cost
- outbound transportation cost, from Warehouse to customer
+ inbound transportation cost, from mfg to warehouse

Data Collection
(look at slide)

Warehouse Costs.
+Handling cost- labor & ultility, porportional to annual flow through the warehouse
+Fixed cost
+Storage cost

Hub vs Direct

Hub only need to add city to network. n-1 routes Hub can provide more frequent flier
Direct need to add new routes for new city. (n(n-1))/2 ie. Southwest.




2)Inventory Positioning: ID stocking point, select facility to produce & stock. keep no inventory after produced, related to inventory management strategies
3)Resource allocation: determine whether production and packaging of different products is done at the right facility.


Homework
we do number 4 aircraft manufacturing