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Case ― 麥當勞. 物料取得之問題 本地供應商產品及進口物料的整合 → 品質檢驗 → 儲貨 ( 乾貨、冷藏品及冷凍品 ) → 訂單管理 → 載運送貨 … 運作方式 桃園南崁 及 彰化大城 各設一 配銷中心 ,處理金流、物流及資訊流 桃園南崁 → 苗栗以北、花蓮 彰化大城 → 苗栗以南、台中到墾丁. 物流網路問題 1. 網路設計 該蒐集哪些資料 ? 市場 需求的分佈情況 產品 特性 應該有多少 廠房、倉庫 區位 的規劃 運輸 模式 服務水準 如何設計規劃 ?. 物流網路問題 2. 存貨定位 儲存點 vs. 製造商直送

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Case ― 麥當勞

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Case ― 麥當勞

  • 物料取得之問題

    • 本地供應商產品及進口物料的整合→品質檢驗→儲貨(乾貨、冷藏品及冷凍品) →訂單管理→載運送貨…

  • 運作方式

    • 桃園南崁及彰化大城各設一配銷中心,處理金流、物流及資訊流

    • 桃園南崁→苗栗以北、花蓮

    • 彰化大城→苗栗以南、台中到墾丁



  • 網路設計

    • 該蒐集哪些資料?

      • 市場需求的分佈情況

      • 產品特性

      • 應該有多少廠房、倉庫

      • 區位的規劃

      • 運輸模式

      • 服務水準

    • 如何設計規劃?



  • 存貨定位

    • 儲存點 vs. 製造商直送

    • 各儲存點之存貨政策為何?

  • 資源配置

    • 不同產品的製造和包裝之設施來源策略為何?

    • 每一設施之產能規劃

    • 案例

      • 國*汽車中壢廠產能不足的因應策略…

Why network planning

Why Network Planning?

  • Find the right balance betweeninventory, transportation and manufacturingcosts,

  • Match supply and demandunder uncertaintyby positioning and managing inventoryeffectively,

  • Utilize resources effectively by sourcing products from the most appropriate manufacturing facility

Three hierarchical steps 1

Three Hierarchical Steps1

  • 1、Network design (3.2)

    • Number, locations and size of manufacturing plants and warehouses

    • Assignment of retail outlets to warehouses

    • Major sourcing decisions

    • Typical planning horizon is a few years.

Three hierarchical steps 2

Three Hierarchical Steps2

  • 2 、 Inventory positioning (3.3)

    • Identifying stocking points

    • Selecting facilities that will produce to stock and thus keep inventory

    • Facilities that will produce to order and hence keep no inventory

    • Related to the inventory management strategies (chapter 2)

Three hierarchical steps 3

Three Hierarchical Steps3

  • 3 、 Resource allocation (3.4)

    • Determine whether production and packaging of different products is done at the right facility

    • What should be the plants sourcing strategies?

    • How much capacity each plant should have to meet seasonal demand?

3 2 network design

3.2 Network Design

  • Physical configuration and infrastructure of the supply chain.

  • A strategic decision with long-lasting effects on the firm.

  • Decisions relating to plant and warehouselocation as well as distribution and sourcing



  • **龍擴充產品線組合

    • 文具皮件鐘錶女性珠寶

  • 問題:

    • 鐘壞了零件需自香港調貨,請等候一個月!

    • 文具與女性珠寶的顧客群是否相同?是否應設置不同屬性之門市?

Reevaluation of infrastructure

Reevaluation of Infrastructure

  • Changes in:

    • demand patterns

    • product mix

    • production processes

    • sourcing strategies

    • cost of running facilities.

  • Mergers and acquisitions may mandate the integration of different logistics networks



  • 泡麵 vs. 三明治

  • 第三方物流 vs. 顧客直送

Key strategic decisions

Key Strategic Decisions

  • Determining the appropriate number of facilities such as plants and warehouses.

  • Determining the location of each facility.

  • Determining thesize of each facility.

  • Allocating space for products in each facility.

  • Determining sourcing requirements.

    • Which plant/vendor should produce which product

  • Determining distribution strategies

    • Which warehouses should service which customers

Network design objective

Network Design: Objective

  • The objective of designing logistics network: minimize annual system-wide costs

    • Production/ purchasing costs

    • Inventory carrying costs

    • Facility costs (handling and fixed costs)

    • Transportation costs

  • Subject to a variety of service level requirements.



  • 花蓮地區的麥當勞由桃園南崁或彰化大城之配銷中心負責配送?

  • ※陽 vs.※瑞的供應商策略…

The impact of increasing the number of warehouses

The Impact of Increasing the Number of Warehouses

  • Improve service level due to reduction of average service time to customers

  • Increase inventory costs due to a larger safety stock

  • Increase overhead and set-up costs

  • Reduce transportation costs in a certain range

    • Reduce outbound transportation costs

    • Increase inbound transportation costs

Industry benchmarks number of distribution centers

Industry Benchmarks:Number of Distribution Centers

Food Companies




# of





- High margin product

- Service not important (or

easy to ship express)

- Inventory expensive

relative to transportation

- Low margin product

- Service very important

- Outbound transportation

expensive relative to inbound

Sources: CLM 1999, Herbert W. Davis & Co; LogicTools

A typical location model

A Typical Location Model

  • There may be an upper bound on the distance between a distribution center and a market area served by it

  • A set of potential location sites for the new facilities was identified

  • Costs:

    • Set-up costs

    • Transportation cost is proportional to the distance

    • Storage and handling costs

    • Production/supply costs

Network design tools major components

Network Design Tools:Major Components

  • Mapping

    • Mapping allows you to visualize your supply chain and solutions

    • Mapping the solutions allows you to better understand different scenarios

    • Color coding, sizing, and utilization indicators allow for further analysis

  • Data

    • Data specifies the costs of your supply chain

    • The baseline cost data should match your accounting data

    • The output data allows you to quantify changes to the supply chain

  • Engine

    • Optimization Techniques

Mapping allows you to visualize your supply chain

Mapping Allows You to Visualize Your Supply Chain

Displaying the solutions allows you to compare scenarios

Displaying the Solutions Allows you To Compare Scenarios

Data collection 1

Data Collection1

  • Locations of customers, retailers, existing warehouses and distribution centers, manufacturing facilities, and suppliers.

  • All products, including volumes, and special transport modes (e.g., refrigerated).

  • Annual demand for each product by customer location.

  • Transportation rates by mode.

Data collection 2

Data Collection2

  • Warehousing costs, including labor, inventory carrying charges, and fixed operating costs.

  • Shipment sizes and frequencies for customer delivery.

  • Order processing costs.

  • Customer servicerequirements and goals.

  • Production and sourcingcosts and capacities

Steps of data collection

Steps of data collection

  • Data aggregation

  • Transportation rates

  • Mileage estimation

  • Warehouse costs

  • Warehouse capacities

  • Potential warehouse locations

  • Service level requirements

  • Future demand

Data aggregation

Data aggregation

  • Aggregating Customers

    • 問題

      • 2005年,麥當勞於台灣有355家分店…

      • 2009年3月,7-11於台灣有4816家店…

  • Product grouping

    • 問題:Sun Rise vs. 智利紅酒 vs. 紅酒 vs. 酒類…

Aggregating customers 1

Aggregating Customers1

  • Customers located in close proximity are aggregated using a grid network or clustering techniques. All customers within a single cell or a single cluster are replaced by a single customer located at the centroid of the cell or cluster.

  • Five-digit or three-digit zip code based clustering.

Aggregating customers 2

Aggregating Customers2

  • We refer to a cell or a cluster as a customer zone.

  • If customers are classified according to their service levels or frequency of delivery, they will be aggregated together by classes.

    • 例如,家樂福 vs. 7-11

A strategy for product aggregation

A Strategy for Product Aggregation

  • Distribution pattern

    • All products picked up at the same source and destined to the same customers are aggregated together.

    • Within each of the source-groups, aggregate the SKU’s (stock keeping unit) by similar logistics characteristics

      • Weight

      • Volume

      • Holding Cost

  • Product type

    • Variations in product models and style

    • Same products are packaged in many sizes

    • These products are typically aggregated together.



  • 科學麵、肉燥麵…

  • 罐裝啤酒、一手、一箱…

Replacing original detailed data with aggregated data

Replacing Original Detailed Data with Aggregated Data

  • Technology exists to solve the logistics network design problem with the original data―例如POS系統…

  • However

    • Data aggregation still useful because forecast demand is significantly more accurate at the aggregated level

    • Aggregating customers into about 150-200 zones usually results in no more than a 1% error in the estimation of total transportation costs

  • General rules for aggregation

    General Rules for Aggregation

    • Aggregate demand points into at least 200 zones

      • Holds for cases where customers are classified into classes according to their service levels or frequency of delivery

    • Make sure each zone has approximately an equal amount of total demand

      • Zones may be of different geographic sizes.

    • Place aggregated points at the center of the zone

    • Aggregate products into 20 to 50 product groups



    • 這個月17吋鈻圈車款250部、開天窗車款120部、紅色車款250部… vs. 這個月轎車需求3000部…

    Example 1



    年 1992 1993 1994 1995 1996 1997 1998

    顧客1 22,346 28,549 19,567 25,457 31,986 21,897 19,854

    顧客2 17,835 21,765 19,875 24,346 22,876 14,653 24,987

    加總 40,181 50,314 39,442 49,803 54,862 36,550 44,841

    Example 2



    平均年需求量 年需求標準差 變異係數(δ/μ)

    顧客1 24,237 4,658 0.192

    顧客2 20,905 3,427 0.173

    加總 45,142 6,757 0.150


    Customer aggregation based on 3 digit zip codes

    Customer Aggregation Based on 3-Digit Zip Codes

    Product aggregation

    Product Aggregation

    Transportation rates

    Transportation Rates

    • An important characteristic of a class of rates for truck, rail, UPS and other trucking companies is that the rates are quite linear with the distance but not with volume

      • 例如,一個人搭Taxi到機楊與4個人搭Taxi到機場的價錢一樣…

    • Differences between internal rateand external rate

    Internal transportation rate

    Internal Transportation Rate

    • For company-owned trucks

    • Data Required:

      • Annual costs per truck

      • Annual mileage per truck

      • Annual amount delivered

      • Truck’s effective capacity

    • Calculate cost per mile per SKU.

    External transportation rate two modes of transportation 1

    External Transportation RateTwo Modes of Transportation1

    • Truckload, TL(整車貨件)

    • Country sub-divided into zones. One zone/state except for:

      • Big states, such as Florida or New York (two zones)

    • Zone-to-zone costs provides cost per mile per truckload between any two zones.

      • TL cost from Chicago to Boston =

        Illinois-Massachusetts cost per mile X Chicago-Boston distance

    • TL cost structure is not symmetric

      • 例如,上山 vs. 下山;逆風 vs.順風…

    External transportation rate two modes of transportation 2

    External Transportation RateTwo Modes of Transportation2

    • Less-Than-Truckload, LTL(零擔貨件)

      • 指託運的貨物裝不滿一個運貨卡車或是託運貨品的重量未達到一般運貨卡車業所指一車的滿載量。如達滿載量,通常會給貨主一個折扣價。

        • LTL運輸費率有三種:等級(class)、例外(exception)及大宗貨品(commodity)

    External transportation rate two modes of transportation 3

    External Transportation RateTwo Modes of Transportation3

    • Less-Than-Truckload, LTL(零擔貨件)

    • Class rates1

      • standard rates for almost all products or commodities shipped.

      • Classification tariff(分類價格表)system that gives each shipment a rating or a class.

      • Factors involved in determining a product’s specific class include:

        • product density, ease or difficulty of handling and transporting, and liability for damage.

    External transportation rate two modes of transportation 4

    External Transportation RateTwo Modes of Transportation4

    • Less-Than-Truckload, LTL(零擔貨件)

    • Class rates2

      • After establishing rating, identify rate basis number(評等基礎數目).

        • Approximate distance between the load’s origin and destination.

      • With the two, determine the specific rate per hundred pounds (hundred weight, or cwt) from a carrier tariff table (i.e., a freight rate table).

    External transportation rate two modes of transportation 5

    External Transportation RateTwo Modes of Transportation5

    • Less-Than-Truckload, LTL(零擔貨件)

    • Exception rates providesless expensive rates

    • Commodity rates are specialized commodity-specific rates

    Mileage estimation

    Mileage Estimation

    • Street Network

    • Straight line distances

    Straight line distances estimation 1

    (lonb, latb)


    (lona, lata)

    Straight-line Distances Estimation1

    • lona: longitude of point a

    • lata: latitude of point a

    • Dab: straight-line distance in miles from a to b

    Straight line distances estimation 2

    Straight-line Distances Estimation2

    • Short distances (does not take into account the curvature of the earth)

    • 美國地區1個經緯度之大約英哩數:69

    Straight line distances estimation 21

    Straight-line Distances Estimation2

    • Long distances (correct for the earth’s curvature)

    Circuity factor

    Circuity Factor(迂迴係數), ρ

    • Equations underestimate the actual road distance.

    • Multiply Dabby ρ.

    • Typical values:

      • ρ= 1.3 in metropolitan areas

      • ρ= 1.14 for the continental United States

    Chicago boston distance

    Chicago-Boston Distance

    • lonChicago = -87.65

    • latChicago = 41.85

    • lonBoston = -71.06

    • latBoston = 42.36

    • DChicago, Boston = 855 miles

    • Multiply by circuity factor = 1.14

    • Estimated road distance = 974 miles

    • Actual road distance = 965 miles

    • GIS systems provide more accuracy

      • However,slows down the systems

    • Above approximation good enough!

    Warehouse costs

    Warehouse Costs

    • Handling costs

      • Labor and utility costs

      • Proportional to annual flow through the warehouse.

    • Fixed costs

      • All cost components not proportional to the amount of flow

      • Typically proportional to warehouse size (capacity) but in a nonlinear way.

    • Storage costs

      • Inventory holding costs

      • Proportional to average positive inventory levels.

    Determining storage costs

    Annual sales

    Inventory turnover ratio=

    Average inventory level

    Determining Storage Costs

    • Multiply average inventory level by holding cost = annual storage costs

    Warehouse capacity

    Warehouse Capacity

    • Average inventory level =

      Annual flow through warehouse/Inventory turnover ratio

    • Space requirement for item = 2*Average Inventory Level

    • Multiply by factor to account for

      • access and handling

      • aisles,

      • picking, sorting and processing facilities

      • AGVs(automatic guided vehicles)

    • Typical factor value = 3

    Warehouse capacity example

    Warehouse Capacity Example

    • Annual flow = 1,000 units

    • Inventory turnover ratio = 10.0

    • Average inventory level = 100 units

    • Assume each unit takes 10 sqft. of space

    • Required space for products = 2,000 sqft. (1002 10)

    • Total space required for the warehouse is about 6,000 square feet(2000 3)

    Potential warehouse locations

    Potential warehouse Locations

    • Geographical and infrastructure conditions.

      • 例如,工業區

    • Natural resources and labor availability.

    • Local industry and tax regulations.

    • Public interest.

    Service level requirements

    Service Level Requirements

    • Specify a maximum distance between each customer and the warehouse serving it

    • Proportion of customers whose distance to their assigned warehouse is no more than a given distance

      • 95% of customers be situated within 200 miles of the warehouses serving them

      • Appropriate for rural or isolated areas (it is harder to provide the same level of service, 例如,花蓮...)

    Future demand

    Future Demand

    • Strategic decisions have to be valid for 3-5 years

    • Consider scenario approach and net present values to factor in expected future demand over planning horizon

    Model and data validation 1

    Model and Data Validation1

    • Reconstruct the existing network configuration using the model and collected data

    • Compare the output of the model to existing data

    • Compare to the company’s accounting information

      • Often the best way to identify errors in the data, problematic assumptions, modeling flaws.

    Model and data validation 2

    Model and Data Validation2

    • Make local or small changes in the network configuration to see how the system estimates impact on costs and service levels.

      • Positing a variety of what-if questions.

    • 通常管理者對系統中小的改變所造成的影響較能精準掌握,而對整個系統大幅度再設計後所產生的結果較無法確認。

    Model and data validation 3

    Model and Data Validation3

    • Answer the following questions:

      • Does the model make sense?

      • Are the data consistent?

      • Can the model results be fully explained?

      • Did you perform sensitivity analysis?

    Solution techniques

    Solution Techniques

    • Mathematical optimization techniques:

      1. Exact algorithms: find optimal solutions

      2. Heuristics: find “good” solutions, not necessarily optimal

    • Simulation models: provide a mechanism to evaluate specified design alternatives created by the designer.

    Heuristics and the need for exact algorithms 1

    Heuristics and the Need for Exact Algorithms1


    • Single product

    • Two plants p1 and p2

      • Plant p1 has an annual capacity of 200,000 units.

      • Plant p2 has an annual capacity of 60,000 units.

    • The two plants have the same production costs.

    • There are two warehouses w1 and w2 with identical warehouse handling costs.

    • There are three markets areas c1,c2 and c3 with demands of 50,000, 100,000 and 50,000, respectively.

    Heuristics and the need for exact algorithms 2

    Heuristics and the Need for Exact Algorithms2


    Distribution costs per unit

    Why optimization matters

    Why Optimization Matters?



    D = 50,000


    Cap = 200,000




    D = 100,000





    Cap = 60,000


    D = 50,000

    Production costs are the same, warehousing costs are the same

    Traditional approach 1 assign each market to closet wh then assign each plant based on cost

    Traditional Approach #1:Assign each market to closet WH. Then assign each plant based on cost.


    D = 50,000

    Cap = 200,000

    $5 x 140,000

    D = 100,000

    $2 x 50,000

    $1 x 100,000

    $2 x 60,000

    Cap = 60,000

    $2 x 50,000

    D = 50,000

    Total Costs = $1,120,000

    Traditional approach 2 assign each market based on total landed cost 1

    Traditional Approach #2:Assign each market based on total landed cost1



    D = 50,000


    Cap = 200,000

    P1 to WH1$3

    P1 to WH2$7

    P2 to WH1$7

    P2 to WH 2$4




    D = 100,000


    P1 to WH1$4

    P1 to WH2$6

    P2 to WH1$8

    P2 to WH 2$3




    Cap = 60,000


    D = 50,000

    P1 to WH1$5

    P1 to WH2$7

    P2 to WH1$9

    P2 to WH 2$4

    Traditional approach 2 assign each market based on total landed cost 2

    Traditional Approach #2:Assign each market based on total landed cost2



    D = 50,000


    Cap = 200,000

    P1 to WH1$3

    P1 to WH2$7

    P2 to WH1$7

    P2 to WH 2$4




    D = 100,000


    P1 to WH1$4

    P1 to WH2$6

    P2 to WH1$8

    P2 to WH 2$3




    Cap = 60,000


    D = 50,000

    P1 to WH1$5

    P1 to WH2$7

    P2 to WH1$9

    P2 to WH 2$4

    Market #1 is served by WH1, Markets 2 and 3

    are served by WH2

    Traditional approach 2 assign each market based on total landed cost 3

    Traditional Approach #2:Assign each market based on total landed cost3


    $0 x 50,000

    D = 50,000

    $3 x 50,000

    Cap = 200,000

    P1 to WH1$3

    P1 to WH2$7

    P2 to WH1$7

    P2 to WH 2$4

    $5 x 90,000

    D = 100,000

    P1 to WH1$4

    P1 to WH2$6

    P2 to WH1$8

    P2 to WH 2$3

    $1 x 100,000

    $2 x 60,000

    Cap = 60,000

    $2 x 50,000

    D = 50,000

    P1 to WH1$5

    P1 to WH2$7

    P2 to WH1$9

    P2 to WH 2$4

    Total Cost = $920,000

    Linear programming model 1

    Linear programming model1


    Linear programming model 2

    Linear programming model2





    The optimal strategy

    The Optimal Strategy


    Optimal distribution strategy

    Simulation models 1

    Simulation Models1

    • Useful for a given design and a micro-level analysis. Examine:

      • Individual ordering pattern.

      • Specific inventory policies.

      • Inventory movements inside the warehouse.

    • Not an optimization model

    • Can only consider very few alternate models

    Simulation models 2

    Simulation Models2

    • Limitation of mathematical optimization techniques: They deal with static models

    • 以模擬模式為基礎的工具可考慮動態系統且能表達出給定設計系統的系統績效。

    Simulation models 3

    Simulation Models3

    • 模擬模式只能模擬預定的物流網路系統。換言之,當提供某一結構的倉庫、零售商…等資料,模擬模式可估計出運作這個結構的成本。如果考慮變換結構(例如:有幾個顧客要改換其他倉庫提供服務),則要重新運作此模式。

    • 一個詳細的模擬模式(納入每個客戶的訂單、特殊存貨、生產政策、每日配銷策略…等),可能需要非常多計算時間來讓系統執行到某一精確度。


    Simulation Models4

    • 如果動態不是主要關鍵,用靜態模式較為適當,且可應用數學最佳化方法。實務上的網路結構大多使用這類型模式。

    • 如果動態是主要關鍵,可利用二階段方法(Hax and Candea):



    Dss for network design 1

    DSS for Network Design1

    • Flexibility to incorporate a large set of preexisting network characteristics

    • Other Factors:

      • Customer-specific service level requirements.

      • Existing warehouses kept open

      • Expansion of existing warehouses.

      • Specific flow patterns maintained

      • Warehouse-to-warehouse flow possible

      • Production and Bill of Materials (BOM) details may be important

    Dss for network design 2

    DSS for Network Design2

    • Robustness

      • Relative quality of the solution independent of specific environment, data variability or specific settings

      • 例如,規劃在越南建廠的流程模型,亦適用於泰國建廠之專案…

    • System running timebe reasonable

    3 3 inventory positioning and logistics coordination

    3.3 Inventory Positioning and Logistics Coordination

    • Multi-facility supply chain that belongs to a single firm

    • Manage inventory so as to reduce system wide cost

    • Consider the interaction of the various facilities and the impact of this interaction on the inventory policy of each facility

    • Ways to manage:

      • Wait for specific orders to arrive before starting to manufacture them [make-to-order facility]

      • Otherwise, decide on where to keep safety stock?

      • Which facilities should produce to stock and which should produce to order?

    Single product single facility periodic review inventory model

    Single Product, Single FacilityPeriodic Review Inventory Model

    • Assume -

      • SI: amount of time between when an order is placed until the facility receives a shipment (Incoming Service Time)(進入服務時間)

      • S:Committed Service Time (允諾服務時間)made by the facility to its own customers.

      • T: Processing Time(處理時間) at the facility.

    • Net Lead Time = SI + T - S

    • Safety stock (cost) at the facility(安全庫存成本):

    2 stage system

    2-Stage System

    • Reducing committed service time from facility 2 to facility 1 (S2 )(or SI1) impacts required inventory at both facilities

      • Inventory at facility 1 is reduced

      • Inventory at facility 2 is increased

    • Overall objective is to choose:

      • the committed service time at each facility

      • the location and amount of inventory

      • minimize total or system wide safety stock cost.



    • 產品階層

      • 成品

      • 組件

      • 零件

    • 存貨應如何配置?

      • 各自獨立管理?

      • 平均分擔?

      • 成品階段?

      • 組件階段?

      • 零件階段?

    Integrating inventory positioning and network design 1

    Integrating Inventory Positioning and Network Design1

    • Consider a two-tier supply chain

      • Items shipped from manufacturing facilities to primary warehouses

      • From there, they are shipped to secondary warehouses and finally to retail outlets

    • How to optimally position inventory in the supply chain?

      • Should every SKU be positioned both at the primary and secondary warehouses?, OR

      • Some SKU be positioned only at the primary while others only at the secondary?

    Integrating inventory positioning and network design 2

    Integrating Inventory Positioning and Network Design 2

    FIGURE 3-18: Sample plot of each SKU by volume and demand

    Three different product categories

    Three Different Product Categories

    • High variability - low volume products

      • 例如,精品

        • 限量筆

    • Low variability - high volume products, and

      • 例如,coca-cola

        • 筆心

    • Low variability - low volume products.

      • 例如,日常民生雜貨...

        • 常銷筆款…

    Supply chain strategy different for the different categories 1

    Supply Chain Strategy Different for the Different Categories1

    • High variability low volume products

      • Inventory risk is the main challenge

      • Position them mainly at the primary warehouses

        • demand from many retail outlets can be aggregatedreducing inventory costs.

      • 例如,物流中心…

    • Low variability low volume products

      • Require more analysis since other characteristics are important, such as profit margins, etc.

    Supply chain strategy different for the different categories 2

    Supply Chain Strategy Different for the Different Categories2

    • Low variability high volume products

      • Position close to the retail outlets at the secondary warehouses

      • Ship fully loaded tracks as close as possible to the customersreducing transportation costs.

      • 例如,顧客直送…

    3 4 resource allocation 1

    3.4 Resource Allocation1

    • Supply chain master planning(供應鏈主計畫)

      The process of coordinating and allocating production, and distribution strategies and resources to maximize profit or minimize system-wide cost

    • 問題:

      • 各廠生產少數品項產品:生產成本低,運輸成本高

      • 各廠生產多品項產品:生產成本高,運輸成本低

    Resource allocation 2

    Resource Allocation2

    • Trade off between production cost and inventory cost. However, the firm optimized production cost usually.(各廠生產少數品項產品)

    Resource allocation 3

    Resource Allocation3

    • Process takes into account:

      • interaction between the various levels of the supply chain

      • identifies a strategy that maximizes supply chain performance

    Global optimization and dss factors to consider

    Global Optimization and DSSFACTORS TO CONSIDER

    • Facility locations: plants, distribution centers and demand points

    • Transportation resources including internal fleet and common carriers

    • Products and product information

    • Production line information such as minimum lot size, capacity, costs, etc.

    • Warehouse capacities and other information such as certain technology (refrigerators) that a specific warehouse has and hence can store certain products

    • Demand forecast by location, product and time.

    Focus of the output

    Focus of the Output

    • Sourcing Strategies:

      • where should each product be produced during the planning horizon, OR

    • Supply Chain Master Plan:

      • production quantities, shipment size and storage requirements by product, location and time period.

    The extended supply chain from manufacturing to order fulfillment

    The Extended Supply Chain: From Manufacturing to Order Fulfillment

    FIGURE 3-19: The extended supply chain: from manufacturing to order fulfillment

    Questions to ask during the planning process 1

    Questions to Ask During the Planning Process1

    • Will leased warehouse space alleviate capacity problems?

    • When and where should the inventory for seasonal or promotional demandbe built and stored?

    • Can capacity problems be alleviated by re-arranging warehouse territories?

    • What impact do changes in the forecast have on the supply chain?

    • What will be the impact of running overtime at the plants or out-sourcing production?

    Questions to ask during the planning process 2

    Questions to Ask During the Planning Process2

    • What plant should replenish each warehouse?

    • Should the firm ship by sea or by air. Shipping by sea implies long lead times and therefore requires high inventory levels. On the other hand, using air carriersreduces lead times and hence inventory levels but significantly increases transportation cost.

    • Should we rebalance inventory between warehouses or replenish from the plants to meet unexpected regional changes in demand?

    Summary network planning characteristics

    SUMMARYNetwork Planning Characteristics



    • Optimizing supply chain performance is difficult

      • conflicting objectives

      • demand and supply uncertainties

      • supply chain dynamics.

    • Through network planning, firms can globally optimize supply chain performance

      • Combines network design, inventory positioning and resource allocation

      • Consider the entire network

        • production

        • Warehousing

        • transportation inventory costs

        • service level requirements.

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