Facility Decisions

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Facility Decisions

• Network Design in a Supply Chain

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Outline

• Location analysis models
• Factors related to location analysis
• Strategic framework for facility location

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Stages in a Supply Chain Network
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Portland
Chicago
Omaha
Cheyenne
Boston
Denver
Baltimore
Salt Lake City
Wichita
Memphis
Atlanta
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Data for Demand Allocation
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Demand Allocation Model- A Typical
Transportation Problem

• Which market is served by which plant?
• Which supply sources are used by a plant?
• xij Quantity shipped from plant site i to
  customer j
• cij transportation cost from plant site i to
  customer j
• Dj Demand at customer j
• Ki Capacity at plant i

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Demand Allocation (only transportation cost is
considered, before merge)
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Portland
Chicago
Cheyenne
Omaha
Boston
Denver
Baltimore
Salt Lake City
Wichita
Memphis
Atlanta
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Demand Allocation (only transportation cost is
considered)
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Portland
Chicago
Omaha
Cheyenne
Boston
Denver
Baltimore
Salt Lake City
Wichita
Memphis
Atlanta
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Fixed Charge Model

• Which plant should be open?
• Which market is served by which plant?
• yi 1 if plant i is open 0 otherwise
• xij Quantity shipped from plant site i to
  customer j
• fi fixed cost of plant i
• cij transportation cost from plant site i to
  customer j
• Dj Demand at customer j
• Ki Capacity at plant i

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Fixed Charged Model (fixed cost is considered)
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Portland
Chicago
Omaha
Cheyenne
Boston
Denver
Baltimore
Salt Lake City
Wichita
Memphis
Atlanta
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Unit Source Model

• Which plant should be open?
• Which market is served by which plant and only by
  that plant?
• yi 1 if plant i is open 0 otherwise
• xij 1 if plant i serve customer j 0 otherwise
• fi fixed cost of plant i
• cij transportation cost from plant site i to
  customer j
• Dj Demand at customer j
• Ki Capacity at plant i

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Unit Source Model (single source requirement
imposed)
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Portland
Chicago
Omaha
Cheyenne
Boston
Denver
Salt Lake City
Wichita
Baltimore
Memphis
Atlanta
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International Example
Demand
Capacity
30
220
32
26
37
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Venezuela
45
45
115
470
200
36
185
185
115
50
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Extended Cases Determination of Plants
Warehouses
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Math. Model of Extended Cases - Parameters
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Math. Model of Extended Cases - Variables
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Math. Model of Extended Cases - Constraints