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Supply Chain and Distribution Network Essay

This paper describes a framework for designing the distribution network in a supply chain. Various factors influencing the choice of distribution network are described. We then discuss different choices of distribution networks and their relative strengths and weaknesses. The paper concludes by identifying distribution networks that are best suited for a variety of customer and product characteristics.

this paper addresses the distribution network design problem under a supply chain system that involves selecting the optimum numbers, locations and capacities of plants and warehouses to open so that all customer demand is satisfied at minimum total costs of the distribution network. We develop a mixed integer programming allowing for multiple levels of capacities available to the warehouses and plants. The paper also provide an efficient heuristic solution procedure for this supply chain system problem, and presents a computational study to investigate the value of coordinating production and distribution planning. Introduction

Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Distribution is a key driver of the overall profitability of a firm because it directly impacts both the supply chain cost and the customer experience. Good distribution can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness. As a result, companies in the same industry often select very different distribution networks.

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