Professional Documents
Culture Documents
Chain
Hi Local FG
Mix
Regional FG
Local WIP
Cost Central FG
Central WIP
Number of Facilities
Customer
DC
Customer
DC
Customer
DC
Customer
DC
Customer
DC
Inventory
Transportation
Number of facilities
Percent Service
Level Within
Promised Time
Facilities
Inventory
Transportation
Labor
Number of Facilities
© 2004 Prentice-Hall, Inc. 5-13
A Framework for
Global Site Location
GLOBAL COMPETITION
COMPTITIVE STRATEGY
PHASE I
Supply Chain
INTERNAL CONSTRAINTS Strategy
Capital, growth strategy, TARIFFS AND TAX
existing network INCENTIVES
PHASE III
Desirable Sites AVAILABLE
INFRASTRUCTURE
PRODUCTION METHODS
Skill needs, response time
Materials Customer
Vendor Finished Customer
DC Store
DC Goods DC DC
Customer
Component Store
Vendor Manufacturing
DC Plant Customer Customer
Warehouse DC Store
Components
DC Customer
Vendor Store
DC Finished
Customer
Goods DC
Final DC Customer
Assembly Store
Store 3
Key Costs:
Fixed facility cost
• Transportation cost
• Production cost
• Inventory cost
• Coordination cost
xij ≥ 0
C o st: T o : A B C D E C a p a c i ty
F ro m : 1 100 190 150 155 110 80
2 111 179 140 140 110 1 4 0T o ta l S u p p l y
5 129 162 135 130 95 140 440
4 132 115 132 128 95 70
5 200 170 100 146 145 1 0 T o ta l D e m a n d
De m a nd 100 100 170 30 40 440
S o l u ti o nT :o : A B C D E Row S um
M o d e l I n p u ts a re e n te re d
F ro m : 1 0 0 0 0 0 0
i n sh a d e d a r e a
2 0 0 0 0 0 0
3 0 0 0 0 0 0
4 0 0 0 0 0 0 T o ta l C o st
5 0 0 0 0 0 0 0
C o lS u m 0 0 0 0 0
O p ti m a l so l u ti o n
re tu r n e d h e r e
Mexico Mexico