Article ID: | iaor1994432 |
Country: | United States |
Volume: | 23 |
Issue: | 3 |
Start Page Number: | 107 |
End Page Number: | 117 |
Publication Date: | May 1993 |
Journal: | Interfaces |
Authors: | Robinson E. Powell, Gao Li-Lian, Muggenborg Stanley D. |
Keywords: | equipment, planning |
Merging two independent distribution systems into an integrated whole poses significant challenges and opportunities for managers. Not only must they analyze the trade-offs among facility, inventory, and transportation costs, but they must also consider customer-service issues. The authors developed an optimization-based decision support system (DSS) for designing two-echelon, multi-product distribution systems and applied it to a problem facing DowBrands, Inc. The DSS provided valuable insight into the problem’s cost and service trade-offs. Savings in logistics arising from its application are conservatively estimated to be $1.5 million per year.