engleski

Facility location analysis in supply chain management : importance, possibilities and application

The paper presents the importance, possibilities and application of facility location analysis in supply chain management. The facility location usually commits the organization to long lasting financial, employment and distribution patterns, affect the costs of doing business and the flow of goods and services. According to that, facility location shapes whole logistics system in organization. It also requires a systematic decision process which involves qualitative and quantitative approach. The basic qualitative factors, which determinate location, are theoretically presented. Quantitative approach is presented with the mathematical model of locating hub facilities that minimizes the transportation costs. In the paper, authors used two methods to find optimal location: (multi)centre of gravity and the p-median method. Based on these theoretical models the solution for a real-world problem is presented.

supply chain management; location; location methods; transport cost optimization

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