Supply chain decisions transportation

It is important to recognize that the three types of supply chain decisions— strategic, tactical, and operational—are interrelated. For example, the number and locations of plants affect the choice of suppliers and the transportation mode for receiving raw materials. Moreover, the number and locations of plants and warehouses also affect the inventory levels required at the warehouses and the delivery times of products to customers. Aggregate production planning decisions affect product availability and customer fulfillment. 

Every forecast supports decisions that are based on it, so an important first step is to identify these decisions clearly. Examples of such decisions include how much of a particular product to make, how much to inventory, and how much to order. All parties affected by a supply chain decision should be aware of the link between the decision and the forecast. For example, Walmart s plans to discount detergent during the month of July must be shared with the manufacturer, the transporter, and others involved in filhng demand, as they all must make decisions that are affected by the forecast of demand. All parties should come up with a common forecast for the promotion and a shared plan of action based on the forecast. Failure to make these decisions jointly may result in either too much or too httle product in various stages of the supply chain. 

The trade-off between transportation and inventory costs is significant when designing a supply chain network. Two fundamental supply chain decisions involving this trade-off are... 

The resulting stock at the different locations of the supply chain is displayed in charts as in Figure 2.3. Additionally, the total stock, the different transportation costs and the costs for using the resources in Malaysia were taken into account and finally led to a recommendation for the floating stock concept together with a specific combination of decision variables. 

Two main decision levels, the level of plants and the level of customers, are considered in the Provimi Pet Food supply chain problem. Customers have certain demands for products which can be produced in the plants. The production process is modeled as being consisted of two consecutive steps. Semi-products are produced in production lines. These semi-products are subsequently mixed and packaged in packaging lines. This packaged product is the final product of the plants, and is transported to the customers. The semi-products can be transported between plants, i.e. a packaging line can package semi-products produced in another plant. 

In an organization, transportation requirements may cover a wide range of territory and frequency characteristics. Decisions are usually made on the basis of cost as long as customer requirements are met. When making decisions that affect the organization s supply chain, it is important not to look at transportation alone or as an independent activity. Instead, transportation should be viewed in the context of the entire supply chain in order to make the most effective decisions (Figure 2). 

Uncertainty breeds inventory. Managers involved in transportation often have to make planning decisions, like routing, that directly affect the movement of raw materials or finished goods. These decisions often affect other components in the supply chain network, in which case the transportation management team cannot afford to make an incorrect decision. Consequently, any mistakes not only jeopardize other elements within the system but also lead to customer dissatisfaction created by the delay in the delivery times (Quirm 1998). 

Often, optimization problems seek a solution where decisions need to be made in a constrained or limited resource environment. The majority of supply chain optimization problems require matching demand and supply when one, the other, or both may be limited. By and large, the most important limited resource is the time required to procure, make, or deliver something. Since the rate of procurement, production, distribution, and transportation resources is limited, demand cannot be im-... 

Pure simulation approaches are proposed by Pitty et al. (2008) and Adhitya and Srini-vasan (2010). Pitty et al. (2008) propose a discrete-event simulation model for a refinery supply chain. Operational decisions such as unloading schedules and production planning are made based on simple priority rules. Various configurations of the modelled SC are studied and compared to reveal optimization potentials. This approach explicitly considers some details of ship and pipeline transports. Adhitya and Srinivasan (2010) describe a discrete-event simulation model for an SC producing and distributing lubricant additives. Here, batch production is modelled. Again, operational production decisions are made by priority rules and a scenario analysis is conducted to evaluate the effects of other priority... 

Supply Chain Management involving materials management, analysis of supply chains, transportation, facility, decisions-network and information technology (IT) in a supply chain. 

Location of plants, warehouses, distribution centers (DCs), manufacturing quantities, order dates, inventory policies, and transportation related decisions are very important for supply chain success. Information system employed for the supply chain is also a key in successful implementations. These decision problems need to be elaborated in detail. 

Key supply chain management decisions include selection of new facility locations, manufacturing quantities, transportation, and information system related decisions. 

Abstract Transportation and facility location decisions are crucial in strategic supply chain design. Optimization models guide location decisions giving the optimal site selection under certain assumptions and constraints. It is an art to decide which model to use and how to modify the results based on the needs of a company. This chapter presents some of the important optimization models in supply chain. Mathematical formulations and solution procedures are also given. The models can be expanded for multi-echelon supply chains and/or include multiple products. 

In Chap. 2, we dealt with topics in supply chain management. Supply chain management comprises decision making about facility location, production, transportation, and inventory control. Many companies employ optimization as a decision making tool. Here, we will introduce important and core optimization models and solution strategies for some important supply chain problems. 

They reveal that facility location problems mostly include inventory and production decisions as well while routing, transportation mode selection, and procurement integrated location decision problems receive less attention in the literature. Facility location decisions are strategic in supply chain design since a company supply chain will need to adapt to changing market needs migrating to new locations for example. They also state that most of the facility location studies consider minimization of costs as the objective. 

The book starts with an Introduction and the second chapter deals with Supply Chain Management. This chapter discusses key decisions in supply chain management and considers planning operations for it. The third chapter introduces Scheduling Models in Supply Chain. The last chapter is Optimization in Supply Chain. Optimization problems and models reviewed are classified under transportation and facility location. 

How does the supply chain impact a product s score Notice that several of the decisions we discussed in previous chapters have a direct impact on a product and a company s score supplier management, transportation, emissions, waste, recycling, packaging, and so on. As more customers start comparing products and making purchase decisions reflecting their individual preferences, the supply chain will impact the top line revenues, in addition to the costs. 

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