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.