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Institutional Affiliation:

Logistics Network

The first thing I would embark on in this design would be to get everyone involved in the entire process, ranging from higher management to all the lowest employee on the company’s payroll, as the decision that we will make not only effect the present, but the future days as well. I will then put together cross-functional teams including someone from the sale department, the marketing department, manufacture, as well as operation. “A cross-functional team can be referred to as a team comprised of professionals drawn from different functional areas within a given company” (Simchi, 2010, pp. 110-1).These teams use concurrent approaches.

According to Tepic, (2011, p. 76)”The logistics design network is simply a strategic decision that possesses long lasting effects, as well as impacts all functions within the company. For the basic success of such a project, several levels of the organization have to be involved”. These are:

Upper Management: This new design has to be aligned with the vision as well as strategic goals of the hiring company. Additionally, such a project might be costly, so management buy-in will be essential in order to ensure that enough resources will be devoted to the project.

Sales and Marketing: Demand forecasts in addition to the anticipated changes in the product design and offerings will affect the network, and the involvement of sales and marketing teams will be required (Donald, 2010).

Manufacturing and Operations: The entire logistics network design will possess an obvious impact on the day-to-day operations of the firm. For the implementation towards success, it is essential that all the people involved with the system of operation on a daily basis will be involved in its design (Simchi, 2010).

The decision showing a single warehouse will be built has been reached up-front. Therefore, we will only need to focus on the final location as well as the capacity of the warehouse, and then determine how much space has to be allocated to each product inside the warehouse. The major steps of the analysis are as outlined below.

Data collection

Location of retail stores, existing warehouses, manufacturing facilities (, and suppliers.

Candidate locations for a new warehouse.

Information about products, i.e., their sizes, shapes and volumes.

Annual demand (past actual plus future estimates) as well as service level requirements of retail stores.

Transportation rates by available modes.

Transportation distances from candidate warehouse locations to retail stores.

Handling, storage as well as fixed costs that are associated with warehousing. Fixed costs have to be expressed as being a function of warehouse capacity (Donald, 2010).

Fixed ordering costs, order frequencies and sizes by product or product family.

Data aggregation

In this case, the following will be included:

Demand require to be aggregated based on the distribution patterns and product types.

Mathematical model building.

Model validation based on the existing network structure.

Selecting of a few low-cost alternatives that are based on the basic mathematical model.

For the final decision, we will incorporate qualitative factors disregarded in the initial mathematical model. For instance, specific regulations and environmental factors.

Optionally, build a detailed simulation model to evaluate these low-cost candidate solutions.

According to Tepic, (2011, pg 65)”With a centralized warehouse, the service level is going to increase and inventory holding costs will be decreasing due to risk pooling. Additionally, fixed costs associated with such warehousing will decrease in a typical way, and inbound transportation costs ranging from the manufacturing facility up to the warehouse level should be less than the total sum of the previous inbound transportation expenditures.” However, we won’t incur increased outbound transportation costs drawn from the focal stockroom to the retailers. In a rundown, the vital configuration exchange off is between transportation expenditures on one hand in addition stock holding expenses and administration level necessities on the other.

In selecting potential stockroom destinations, it is critical to consider issues, for example, land and base conditions, characteristic assets and work accessibility, nearby industry and expense regulations, and open investment (Mallik, 2010). For each of the accompanying commercial enterprises, give particular cases of how the issues recorded above could influence the decision of potential stockroom locales:

automobile fabricating



Aircraft fabricating

book circulation

Furniture assembling and circulation

Pc fabricating

In, for example, car producing, autos are typically conveyed over area, and interest is focused around significant urban areas. Therefore, we would expect distribution centers in this industry to be found close extensive urban areas with simple access to expressways and railroads. This would help to decrease the conveyance lead time to dealerships in the urban areas (Donald, 2010).

In the pharmaceutical business, overnight conveyance is normal. Accordingly, closeness to a real airplane terminal is a variable that ought to be considered when picking a stockroom area. Moreover, for crude material distribution centers it is critical that these are near characteristic assets (Simchi, 2010).

In the book business, supplier stockroom areas would be influenced by the accessibility of adjacent regular assets.

With an extensive client build looking for books with respect towards this line, short conveyance lead times are essential. In this manner, in book dissemination, we would hope to discover huge concentrated stockrooms on sensibly valued area where fast transportation modes are accessible (Mallik, 2010). At the end of it all, the warehouse will be fully functional. The logistics network with only one warehouse will be realized out of all the steps described above.


Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and managing the supply

chain: Concepts, strategies, and case studies. (3rd ed.). New York: McGraw-Hill/Irwin, pp 110-1

Tepic, J., Tanackov,I., S.Gordan (2011). Ancient Logistics – Historical Timeline and Etymology.

Technical Gazette, pg 76.

Donald, W. (2010). Alexander the Great and the Logistics of the Macedonian Arm. University

of California

L. Torre, Smilowitz, I. (2012). Disaster relief routing: Integrating research and practice Socio

Economic Planning Sciences vol46.

Mallik, S. (2010). “Customer Service in Supply Chain Management”. The Handbook of

Technology Management: Supply Chain Management, Marketing and Advertising, and

Global Management, vol 2 (1 ed.). Hoboken, New Jersey.

R. Ruggeri, A. Perego.(2002). Industrial Logistics

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