Supply Chain Management for Engineers

5

Moving Products across Supply Chain: Distribution Network Design and Transportation Decision Making

5.1  Overview

In a supply chain, raw materials and components are moved from suppliers to manufacturers and finished products are moved from manufacturers to consumers. The movement of goods in a supply chain is referred to as distribution. Distribution is an important factor in determining the profitability of a supply chain. It affects both the supply chain costs and customer experience. Costs associated with a distribution network are summarized as follows:

•  Facility costs: Facilities include production plants and warehouses. A supply chain needs to have a sufficient number of facilities to meet customer demand. However, as the ...