Network planning for my Logistics class Essay Example | Topics and Well Written Essays - 1000 words

Ne twainrk planning for my Logistics class - Essay ExampleThe decisions made on the logistics network are usually framed to accomplishment as a trade-off between the dictated costs of a warehouse and the costs of transporting the goods. This means that, if the network has a few warehouses, then on that point is a reduction of fixed costs although it raises the transportation costs. Adding to a greater extent warehouses on the network reduces the transportation costs and increasing the fixed costs. There are two different factors which one must consider when designing a network design.The first factor which a logistician must consider most is the distance. Adding more warehouses in a network decreases the number of kilometers travelled because the distance from the supplier to the warehouse and then to the customer is minimized. Moreover, the most expensive part in the logistics is the campaign of goods from the warehouse to the end user since the load shipped is always divided in to different quantities. The more the warehouses on the design network the fewer the kilometers between the customer and the stores.This typography includes the second factor which is to optimally solve the network design problems whereby there is the inclusion of inventory cost. Ballou (2001) acknowledges the importance of the inventory costs inclusion over the fixed costs of warehousing and also the costs of the transportation. Ballou (2001) also explains that the absence of the inventory costs in network design is caused by the mixed integer in the linear programming, of which is a requirement to have the cost relationships to be linear. Unfortunately, in the real world, the relationships between the inventory and the number of warehouses are not linear.Using the advancement of including the inventory costs motivates one to treat the relationship between the inventory and the number of warehouses as a function which is discrete. This is the reason of proposing the model that ma y be used by different firms through the inclusion of inventory in the