Transportation, facility location and inventory issues in distribution network design

Abstract

Examines the interdependence between facility location, transportation and inventory issues in a distribution network design problem. Management of inventories, determination of transportation policy, and location of plants and distribution centers are normally carried out by different groups of people in an organization. These activities interact, however, when the transportation is used to replace inventory, an increase in the number of warehouses increases total system inventory or location of warehouses would dictate the type of transportation mode choice or carrier that needs to be used. The proposed model, FLITNET, is expected to provide a more complete representation of the trade‐offs that exist among the location, transportation and inventory cost components, and lead to an optimal solution.

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