Supply chain management

• What do we mean by logistics?
• Plan of the chapter.
• Structure of production/distribution networks.
• Competition factors, cost drivers, and strategy.
• Competition factors.
• Cost drivers.
• Strategy.
• The role of inventories.
• A classical model: Economic Order Quantity.
• Cycle vs. capacity-induced stock.
• Dealing with uncertainty.
• Setting safety stocks.
• A two-stage decision process: Production planning in an assemble-to-order environment.
• Inventory deployment.
• Physical flows and transportation.
• Time horizons and hierarchical levels.
• Decision approaches.
• Information flows and decision rights.
• Quantitative models and methods.
• For further reading.

Network Design and Transportation

• The role of intermediate nodes in a distribution network.
• The risk pooling effect: reducing the uncertainty level.
• The role of transit points in transportation optimization.
• Location and flow optimization models.
• The transportation problem
• The minimum cost flow problem.
• The plant location problem
• Putting it all together
• Models involving nonlinear costs.
• For Further Reading.