Abstract
Transportation usually represents the most important single element in logistics costs for most firms. One of the tactics to reduce transportation costs is simplifying distribution network aiming to more efficient and inexpensive network.
However, sometimes distribution centers exist to achieve certain delivering service level and in this case, those center (s) might be constrains to do restructuring process forward. You should find “optimum point” regarding both delivery service and total logistics cost. The method of developing optimum logistics network should be followed steps shown below.
STEP1: Surveying current level of delivery service
STEP2: Deve1oping logistics network structure models
STEP3: Developing logistics location network models
STEP4: Evaluating models by using dynamic warehouse location & distribution network models
At STEP4, trade-off between delivery service and total logistics cost is evaluated. Basically, through these four steps, firms will be able to formulate optimum logistics network . As the advanced stage, including fixed assets cost to evaluate network might be necessary.
