Logistics Network Design with Differentiated Delivery Lead Time: A Chemical Industry Case Study

• Main Authors: CHEONG, Michelle Lee Fong, Bhatnagar, Rohit, Graves, Stephen C.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: Logistics Network Design; Demand Classes; Benefits; Insights; Artificial Intelligence and Robotics; Operations and Supply Chain Management; Operations Research, Systems Engineering and Industrial Engineering
• Online Access: https://ink.library.smu.edu.sg/sis_research/1177; https://ink.library.smu.edu.sg/context/sis_research/article/2176/viewcontent/Logistics_Network_Design_with_Differentiated_Deliv.pdf
• Institution: Singapore Management University

Most logistics network design models assume exogenous customer demand that is independent of the service time or level. This paper examines the benefits of segmenting demand according to lead-time sensitivity of customers. To capture lead-time sensitivity in the network design model, we use a facility grouping method to ensure that the different demand classes are satisfied on time. In addition, we perform a series of computational experiments to develop a set of managerial insights for the network design decision making process.