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A Logistic Network Design In China Assignment

1278 words - 6 pages


Assignment I

In this section, I provide a COG procedure for designing 1 DC for the company, and an NLP method for the 2-DC assignments.


Single-DC Location Design

Apart from what the problem has given, we only need to determine the exact geometric locations of the 6 cities. And I use longitudes for x-coordinate value and latitudes for y-coordinate value. The fundamental information is presented as follows: For an approximate COG, we just compute City Nan Chang Xi’an Beijing Shanghai Guangzhou Chengdu Longitude 115.9 109 116.4 121.4 113.2 104.1 Latitude 28.7 34.3 39.9 34.5 23.2 30.7 Volume(Vi ) 1000 800 600 400 500 300 Rate(Ri ) 0.5 0.7 0.8 1.8 1 0.6

Table 1: ...view middle of the document...

Then Aij , the amount of product A plant i = 1, 2 sends to DC j = 1, 2, and DC i = 1, 2 sends to market city j = 3, 4, 5, 6, similar definition for Bij .ri the transport rate for city i. Therefore, we formulate the NLP:
2 6

min z =
i=1 j=1

ri dij (Aij + Bij )

s.t. A11 + A12 ≤ 1000 B11 + B12 ≤ 800 A13 + A14 + A15 + A16 ≤ A11 A23 + A24 + A25 + A26 ≤ A12 B13 + B14 + B15 + B16 ≤ B11 B23 + B24 + B25 + B26 ≤ B12 A13 + A23 + B13 + B23 ≥ 600 A14 + A24 + B14 + B24 ≥ 400 A15 + A25 + B15 + B25 ≥ 500 A16 + A26 + B16 + B26 ≥ 300 x1 , x2 , y1 , y2 within the convex hull of the 6 cities ∀Aij , Bij ≥ 0 Note dij = (xi − xj )2 + (yi − yj )2


Thus, by solving the NLP, we get the location of the 2 DCs at x1 = 117.9, y1 = 33.5, x2 = 109.0, y2 = 34.3, suggesting 1 DC at Shanghai exactly and the other at Guangzhou exactly. Also a delivering strategy is obtained. (see .xls file for details)

Figure 1: DC solutions for comparison (with a 2-DC strategy)

From Nanchang (P1) Nanchang (P1) Xi’an(P2) Xi’an(P2)

To Shanghai (DC1) Guangzhou(DC2) Shanghai (DC1) Guangzhou(DC2)

Product A 495.5 504.5 0 0

Product B 0 0 404.9 395.1

Table 3: Plant Allocation Strategy

From Shanghai Shanghai Shanghai Shanghai

(DC1) (DC1) (DC1) (DC1)

To Beijing (M1) Shanghai (M2) Guangzhou (M3) Chengdu (M4)

Product A 95.5 400 0 0

Product B 404.9 0 0 0


From Guangzhou Guangzhou Guangzhou Guangzhou

(DC2) (DC2) (DC2) (DC2)

To Beijing (M1) Shanghai (M2) Guangzhou (M3) Chengdu (M4)

Product A 58.3 0 248.6 504.5

Product B 41.2 0 251.4 395.1

Table 4: DC Allocation Strategy And by setting DC at two market cities, this plan has achieved an enormous cost reduce to only RMB 6423.3! (Of course, this model does not include DC setup costs) Far more better than the single-DC plan.


Assignment II

In this section, we just intend to give an intuitive answer suggesting for Taylor’s EDN plan. I think the crux here is how to EVALUATE the value and PREDICT its future performance of this plan.


Question 1: Remain or Change?

Obviously, this is the first question we must answer. After all, Amazon is growing rapidly and earning big money. The situation is still satisfying: the revenue gained in Europe is increasing, and new technology is being introduced as well. However, as I mentioned, a not-bad current situation may be a hazard and obstacle to survive. There are many examples like Kodak, Nokia to lie on their heritage but turn out to...

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