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The design of a physical distribution system is a complex task because of the various elements involved, along with their interactions. Two key elements of the system are location of depots and routing of customers from the depots. The interdependence between these two elements has been studied and solution procedures have been developed. Most research into the design of distribution systems has, however, overlooked the possible effect of the system's environment on the solution efficacy. There are various environmental and operational factors that must be considered in physical distribution system design.
In this research, several significant environmental factors that influence distribution system design such as ratio of location to routing cost and spatial distribution of customers are investigated. The effect of these factors on some alternative location-routing procedures is examined. The research shows that the performance of alternative location-routing procedures is affected by various key environmental factors. The implication for the decision maker is that the choice and use of alternative solution procedures should be based on systems' environment.
∗Rajesh Srivastava is Assistant Professor of Management at Marquette University. He received his B.Tech. in electrical engineering from Indian Institute of Technology, Kanpur, his MBA from the University of Wisconsin-Whitewater, and his PhD from the Ohio State University. Dr Srivastava's papers have appeared in Decision Sciences and in refereed proceedings. His research interests are in operations management in areas such as facility location, vehicle scheduling, manufacturing planning and control systems, and inventory systems.
†W. C. Benton is Associate Professor of Management Sciences at Ohio State University. He received his doctorate from Indiana University, Bloomington. His research interests include materials management, inventory planning and control, and vehicle scheduling. His research papers have appeared in Decision Sciences, Journal of Operations Management, IEE Transactions, Naval Research Logistics and International Journal of Production Research among others..................................A supply chain is a network of facilities that performs the functions of procurement of material, transformation of material to intermediate and finished products, and distribution of finished products to customers. Often, organizational barriers between these facilities exist, and information flows can be restricted such that complete centralized control of material flows in a supply chain may not be feasible or desirable. Consequently, most companies use decentralized control in managing the different facilities at a supply chain. In this paper, we describe what manufacturing managers at Hewlett-Packard Company (HP) see as the needs for model support in managing material flows in their supply chains. These needs motivate our initial development of such a model for supply chains that are not under complete centralized control. We report on our experiences of applying such a model in a new product development project of the DeskJet printer supply chain at HP. Finally, we discuss avenues to develop better models, as well as to fully exploit the power of such models in application.
