Network Design

in the Supply Chain

Hari Soesanto
Indonesia
 Overview

z Network design decisions

z Gravity methods for location
 Network design decisions

z Facility role
z Facility location
z Capacity allocation
z Market and supply allocation
 Gravity Methods for location

Ton Mile-Center Solution

( x − xn) + ( y − y n)
z 2 2
d n
=
z x,y: Warehouse Coordinates
D nx F
k
z xn, yn : Coordinates of delivery ∑ d
n n

location n x= n =1 n

D nF
k
z dn : Distance to delivery location ∑ d
n

n n =1 n

Fn : Annual tonnage to delivery D ny F

k

∑
z n
n
location n y= n =1 d n

D nF
k

∑ d
n

∑ d nDnF n
n =1 n

Min
 Center of Gravity Technique
n
• The center of movement in a
geographic area based on
∑ xiWi
x= i =1
transport weight and distance. n

∑Wi
i =1
• x, y = coordinates of the new
facility at center of gravity n
• xi, yi = coordinates of existing ∑
facility i y= i =1
n
• Wi = annual weight shipped from ∑
i =1
facility i
 Load-Distance Technique
• A method of evaluating different locations based on the
load being transported and the distance.
n
LD = ∑ Lidi
i =1

LD = the load-distance value

Li = the load expressed as a weight, number of trips, or units being
shipped from the proposed site to location i
di = the distance between the proposed site and location i

di = (xi − x )2 + ( yi − y )2
(x, y) = coordinates of proposed site
(xi, yi) = coordinates of existing facility
Thank You