assignment product-warehouse-outlet builds and assigns products
and outlets to warehouses and secondly allocates inventories, e.g., frozen products
can be delivered to all outlets from a central warehouse, as requirements for cooled
SCs require special equipment. The allocation of inventories across warehouses
and outlets builds a liaison across master planning modules. Retailers could hold
inventories at central and/or regional warehouses and at the back- and showroom
of the outlets. Inventories along the SC are used to increase economies of scale, to
balance supply and demand at the individual stations and to hedge against uncertain
demand and shortcomings. Since distribution managers are increasingly caught
between market pressures on the one hand and the trade-off between high cost of
inventories and increased shipment frequencies on the other hand, it is important
to plan carefully how centralized a product should be stored