BU435 Chapter Notes - Chapter 5: Supply Chain Network, Supply Chain, Costco
Document Summary
Chapter 5: network design in the supply chain. Learning objectives: understand the role of network design in a supply chain, identify factors influencing supply chain network design decisions, develop a framework for making network design decisions, use optimization for facility location and capacity allocation decisions. 5. 1 the role of network design in the supply chain. Supply chain network design decisions include the assignment of facility role; location of manufacturing, storage, or transportation related facilities; and the allocation of markets to each facility . Facility location: where are the facilities physically located (think transportation) Capacity allocation: how much capacity should be allocated to each facility. Market and supply allocation: what markets should be served and what supply sources should feed each facility. Low cost strategies will locate the production facilities in countries of cheap labor for example. Companies focusing on responsiveness may locate close to their market (at a higher cost) Convenience stores vs. costco location vs. low price strategy.
