Professional Documents
Culture Documents
Network Design in The Supply Chain: Powerpoint Presentation To Accompany Powerpoint Presentation To Accompany
Network Design in The Supply Chain: Powerpoint Presentation To Accompany Powerpoint Presentation To Accompany
Supply Chain
PowerPoint presentation
to accompany
Chopra and Meindl
Supply Chain Management, 6e
Copyright © 2016 Pearson Education, Inc. 5–1
Learning Objectives
1. Understand the role of network design in a
supply chain.
2. Identify factors influencing supply chain network
design decisions.
3. Develop a framework for making network design
decisions.
4. Use optimization for facility location and
capacity allocation decisions.
1– b – a 1+ b – a
d1 =a + and d 2 =
2 2
Copyright © 2016 Pearson Education, Inc. 5–7
Framework for Network Design
Decisions
• Phase I: Define a Supply Chain
Strategy/Design
– Clear definition of the firm’s competitive strategy
– Forecast the likely evolution of global competition
– Identify constraints on available capital
– Determine broad supply strategy
FIGURE 5-3
åx ij
=D j for j =1,...,m
i=1
m
åx ij
=K i yi for i =1,...,n
j=1
FIGURE 5-4
FIGURE 5-5
FIGURE 5-5
FIGURE 5-6
FIGURE 5-7
2 2
dn = ( x – x ) +( y – y )
n n
FIGURE 5-8
Copyright © 2016 Pearson Education, Inc. 5 – 24
Gravity Location Model
FIGURE 5-8
k k
Dn Fn xn Dn Fn yn
å d å d
n=1 n=1
x ¢= k
n
and y¢= k
n
Dn Fn Dn Fn
å d å d
n=1 n n=1 n
Demand City
Production and Transportation
Cost per Thousand Units (Thousand $)
Monthly Monthly
Capacity Fixed Cost
(Thousand (Thousand
Supply City Atlanta Boston Chicago Denver Omaha Portland Units) K $) f
Baltimore 1,675 400 985 1,630 1,160 2,800 18 7,650
Cheyenne 1,460 1,940 970 100 495 1,200 24 3,500
Salt Lake 1,925 2,400 1,450 500 950 800 27 5,000
City
Memphis 380 1,355 543 1,045 665 2,321 22 4,100
Wichita 922 1,646 700 508 311 1,797 31 2,200
Monthly 10 8 14 6 7 11
demand
(thousand
units) Dj
TABLE 5-2
n m subject to
Minå å cij xij
n
i=1 j=1 åx =D j for j =1,..., m
ij
i=1
m
åx ij £K i for i =1,..., n
j=1
TelecomOne Baltimore 0 8 2
Memphis 10 0 12
Wichita 0 0 0
Cheyenne 6 7 0
TABLE 5-3
FIGURE 5-9
FIGURE 5-10
Copyright © 2016 Pearson Education, Inc. 5 – 32
Capacitated Plant Location Model
FIGURE 5-10
FIGURE 5-11
FIGURE 5-12
Copyright © 2016 Pearson Education, Inc. 5 – 35
Capacitated Model With
Single Sourcing
• Market supplied by only one factory
• Modify decision variables
yi = 1 if factory i is open, 0 otherwise
xij = 1 if market j is supplied by factory i, 0 otherwise
n n m
Minå f i yi + å å D j cij xij
i=1 i=1 j=1
subject to
åx ij =1 for j =1,..., m
i=1
m
å Dx j ij £K i yi for i =1,..., n
j=1
xij , yi Î { 0,1}
Memphis Open 10 8 0 0 0 0
Wichita Open 0 0 14 0 7 0
TABLE 5-4
FIGURE 5-13
i i e e hi ie ie ej ej
i=1 e=1 h=1 i=1 i=1 e=1 e=1 j=1
n m
åx hi
£Sh for h =1,...,l åx ej
£We ye for e =1,...,t
i=1 j=1
l t t
åx hi
– å xie ³ 0 for i =1,...,n åx ej
=D j for j =1,...,m
h=1 e=1 e=1
t
åx ie
£ K i yi for i =1,...,n yi , ye Î { 0,1} , xej , xie , xhi ³ 0
e=1
n m
å x –å x ie ej
³ 0 for e =1,...,t
i=1 j=1
m n n n m
Maxå rj å xij – å Fi yi – å å cij xij
j=1 i=1 i=1 i=1 j=1
n
åx ij
£D j for j =1,...,m
i=1