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Three fact should be met in network Distribution & Design
Customer needs that are met
Cost of meeting customer needs
Distribution network design
At the highest level, performance of a distribution network should be evaluated along two dimensions:
1.Customer needs that are met
2.Cost of meeting customer needs
Thus, a firm must evaluate the impact on customer service and cost as it compares different distribution networkoptions. The customer needs that are met influence the company's revenues, which along with cost decide the profitabilityof the delivery network. Although customer service consists of many components, we focus on those measures that are influenced by the structure of the distribution network. These include:
*Response time
*Product variety
*Product availability
1. Distribution network performance evaluated along two dimensions at the highest level:
· Customer needs that are met
· Cost of meeting customer needs
· Distribution network design options must therefore be compared according to their impact on customer service and the cost to provide this level of service
2. Elements of customer service influenced by network structure:
· Response time
· Product variety
· Product availability
· Customer experience
· Order visibility
· Returnability
3. Supply chain costs affected by network structure:
· Inventories
· Transportation
· Facilities and handling
· Information
