Distribution Network Design and Facility Location
Module 02 · Week 37 · Network design
Distribution Network Design and Facility Location
Distribution network structures, inventory positioning, facility location, and demand allocation under cost and service requirements.
Decision levelStrategic network configuration
Core modelWarehouse location and demand allocation
AssignmentAssignment 1: Activity Profiling · Q&A
Which warehouse locations and demand assignments create the strongest service–cost position?
Warehouse performance starts before the building exists. This module places facility decisions inside the distribution network and makes explicit how the number, location, and role of warehouses affect transport, inventory, service, capacity, and exposure to risk.
By the end of this module, you can
- distinguish single- and multi-warehouse network structures;
- explain the main service, transport, inventory, and risk trade-offs;
- formulate a quantitative warehouse-location decision;
- interpret allocation variables and model assumptions; and
- relate facility location to decisions at other planning levels.
Slides
Week contents
Deck 06A · Distribution Networks and Inventory Positioning
Distribution Requirements
- Distribution planning decisions
- Product and distribution requirements
Distribution Channels
- Direct shipment
- Distribution through facilities
- Distribution facility roles
Inventory Positioning
- Centralized inventory
- Decentralized inventory
- Hybrid inventory positioning
Distribution Network Structures
- Direct and centralized distribution networks
- Multi-echelon distribution network
- Cross-docking configurations
Transportation, Inventory, and Service Trade-offs
- Shipment consolidation and transportation cost
- Transportation alternatives and rates
- Effect of distribution facilities
- Facility count and inventory cost
- Facility proximity and customer service
Deck 06B · Warehouse Network Design
Number of Distribution Facilities
- Network design decisions
- Facility number and market scope
- Total logistics cost trade-offs
- Facility count: cost and service example
Facility Ownership and Outsourcing
- Private, public, and contract warehousing
- Private warehousing
- Public and contract warehousing
- Shipper and service provider perspectives
- Factors affecting distribution facility ownership
- Distribution cost comparison
Site Selection and Network Evaluation
- Demand, products, and service requirements
- Accessibility, resources, and context
- Integrated framework
- Location and allocation criteria
- Network planning scenarios
Changes in Network Conditions
- Drivers of centralization
- Drivers of decentralization
- Manufacturing offshoring and distribution
Deck 07 · Facility Location Models
Facility Location Foundations
- Facility location decisions
- Location spaces
- Model assumptions
- Allocation and capacity structures
- Mathematical notation
Distance and Coverage Models
- Median models
- \(p\)-median formulation
- Center and covering models
- Coverage-distance scenarios
Warehouse Location Problems
- Fixed-charge facility location models
- Uncapacitated warehouse location formulation
- Capacitated warehouse location formulation
- Multi-echelon models
Solution Methods
- Method comparison
- Metaheuristics
- Genetic algorithm structure
Application: Urban Distribution
- Model selection for urban distribution
- Demand, candidate sites, and distances
- Model design
- Interpretation and sensitivity analysis
- Main conclusions
Appendix: Extensions and Evaluation
- Continuous single-facility location
- Discrete-event simulation
- Multi-criteria decision analysis
- Multiple objectives
Assignment
Continue Assignment 1
Use the Q&A route to test the definitions, assumptions, and evidence behind the seven activity profiles and five KPI assessments. Canvas remains authoritative for live instructions and deadlines.