distances between provinces were quiet short, especially in the center part of Thailand. Such as,
distance between Singburi and Aungthong is only 25 kilometers.” Mr. Pradit said that it might
be a good idea. Another staff said “We might cut all sub-centers and distribute products from the
head centers to the customers.” Pradit said “This idea is also possible. However, we might need
more than 5 head centers. We should get some responses from the customers.” After the meeting,
they arranged the meeting with some of their customers. The meeting report summarized that
customers wanted to receive the products within 6 working hours after order placing. The
warehouse operations took about 4 hours per order. The rest of the time must be enough for
shipping time. Therefore, the maximum distance between any two sub-centers would be 60
kilometers on highway in order to cover all wholesalers in their areas. Normally, inventory at a
sub-center was replenished by only one head center on average one time per week. Each
wholesaler could order any times he wanted.
Conclusion
Mr. Pradit wondered whether he could eliminate some sub-centers as a way of reducing costs. If
this was possible how could he determine which sub-centers had to cut. Mr.Pradit wanted to
keep the number of new head centers is as low as possible.