Analytical results for two-echelon distribution network design

Analytical models of single-echelon distribution systems have been reported in the literature. Analysis of these models, which are based on an assumption that demand is uniform, have led to an improved understanding of single-echelon network design problems involving more complex systems with varying demand density. Two models of a two-echelon distribution system are proposed and investigated in this paper. The first model assumes that demand is uniform and is an extension of a single-echelon analytical model. The second model is of a much more general two-echelon system with demand at discrete locations. Analytical results pertaining to the sensitivity of the optimal configuration to changes in problem parameters and the question of when a two-echelon system is beneficial are developed.