### Abstract

Supply network design involves making decisions about the number and location of physical
distribution facilities and the transportation network required to support them. Supply chain design
methodologies appearing in the academic literature can be broadly classified as: deterministic,
stochastic or dynamic. Stochastic approaches employ probability density functions to model demand
and inventory decisions. In practice this work is normally undertaken once the physical supply network
has been decided. Dynamic supply chain design employs control theory to understand the effect of time
delays and feedback paths on system behaviour. However, as both stochastic and dynamic approaches
are normally applied after the physical network has been decided, then the potential of these methods
is constrained. In this paper we will present a new method for integrating deterministic, stochastic and
dynamic approaches to supply chain design, which we will illustrate by means of a simple example.
Maister (1976) has shown that as a distribution network is consolidated the inventory required obeys
the square root law. This knowledge was recently supplemented by that fact that the capacity of the
distribution centres also obeys the same square root law. This conclusion was reached via control
theory analysis of a divergent supply chain (Ratanachote and Disney, 2008). Here we extend this approach to consider the effect of transportation lead-times and costs on the distribution network
design.

Original language | English |
---|---|

Title of host publication | operational Research Society Conference 2008 |

Publication status | Published - 2008 |

Event | operational Research Society Conference 2008 - York, UK Duration: 1 Jan 2008 → … |

### Conference

Conference | operational Research Society Conference 2008 |
---|---|

Period | 1/01/08 → … |

## Fingerprint Dive into the research topics of 'Dynamic supply network design: integrating inventory and transportation modelling'. Together they form a unique fingerprint.

## Cite this

McCullen, P., & Disney, S. (2008). Dynamic supply network design: integrating inventory and transportation modelling. In

*operational Research Society Conference 2008*