Logistics network configuration is concerned with designing the optimal network to satisfy service requirements at the minimum cost. The optimal network consists of,
• Optimal number of warehouses and distribution centers (DCs)
• Location of these warehouses and DCs
• Service areas of each warehouse and DC
• Routings of the goods (e.g. direct shipping or via consolidation)
• Type and amount of inventory to be stored at each location
• Allocation of production plants to warehouses and DCs
The interested readers can be referred to Cooper [28], Balakrishnan, Magnanti and Wong [29], and Nozick [30] for a review of location problems.