PART II

DESIGNING THE SUPPLY

CHAIN NET"\VORK

CHAPTER 4
DESIGNING DISTRIBUTION NETWORKS
AND APPLICATIONS TO E-BUSINESS
C"''n.

CHAPTER 5
NETWORK DESIGN IN THE SUPPLY CHAIN
C"''n.

CHAPTER 6
NETWORK DESIGN IN AN UNCERTAIN
ENVIRONMENT

he goal of the chapters in Part II is to discuss a set of frameworks and tools used to
T design supply chain networks. Network design decisions are among the most
important supply chain decisions, as their implications are significant and long lasting. In
designing a supply chain, we need to consider how all supply chain drivers--facilities,
transportation, inventory, information, sourcing, and pricing--should be used together
to support the competitive strategy of a firm and maximize supply chain profits.
Chapter 4 explores how to design a distribution network. A variety of distribution
network models are presented, along with an analysis of the pros and cons of each
model. This chapter also includes an in-depth discussion of the design of distribution
networks in the context of e-business. Chapter 5 considers facility-related decisions
that firms must make when designing their supply chain network. A framework for
facility decisions in a supply chain is developed, and methodologies for locating facili-
ties and allocating capacity and markets to each facility are described. Chapter 6 high-
lights how uncertainties in demand and financial factors such as prices, exchange rates,
and inflation should be accounted for in supply chain decisions. Methodologies for
evaluation of network design decisions under uncertainty are discussed. These
methodologies are then used to evaluate several network design decisions.