CHAPTER 6 – DISTRIBUTION AND TRANSPORTATION IN A

SUPPLY CHAIN

Dung H. Nguyen
Faculty of International Economic Relations
University of Economics and Law

‹#› Het begint met een idee

CONTENTS

 Distribution
 Transportation

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ROLE OF DISTRIBUTION

Steps to move and store a product from a supplier stage to a

customer stage
 Two phases of designing a distribution network:
o Decide the number of stages and their roles
o Convert the distribution structure into specific locations, capability,
capacity, demand allocation

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PERFORMANCE OF A DISTRIBTUION NETWORK

 Service factors
o Response time
o Product variety
o Product availability
o Customer experience
o Time to market
o Order visibility
o Returnabilty
 Cost factors
o Inventory
o Transportation
o Facilities and handling
o Information
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MANUFACTURER STORAGE WITH DIRECT SHIPPING

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Source: Chopra and Meindl (2016)
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MANUFACTURER STORAGE WITH DIRECT SHIPPING AND IN-TRANSIT MERGE

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Source: Chopra and Meindl (2016)
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DISTRIBUTOR STORAGE WITH CARRIER DELIVERY

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Source: Chopra and Meindl (2016) Vrije Universiteit Amsterdam
DISTRIBUTOR STORAGE WITH LAST-MILE DELIVERY

Source: Chopra and Meindl (2016)

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MANUFACTURER OR DISTRIBUTOR STORAGE WITH CUSTOMER PICKUP

click and collect

Source: Chopra and Meindl (2016)

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RETAIL STORAGE WITH CUSTOMER PICKUP

Source: Chopra and Meindl (2016)

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ROLE OF TRANSPORATION

The physical movement of materials between points in the supply

chain
 Transport principles:
o Economy of scale
o Economy of distance
 Transportation members:
o Shippers and Consignees
o Carriers and Agents
o Owners and operators of transportation infrastructure
o Transportation policy makers

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RELATIONSHIPS BETWEEN TRANSPORTATION AND LOGISTICS

• Transportation costs and facility locations

• Inventory requirements and transport mode
• Transport mode and packaging
• Type of carrier and material handling equipment
• Shipment consolidation and shipment size
• Customer service goals and type/quality/service of carrier

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TRANSPORT RATE AND TARIFF

 Transport rate
 Tariff
 Minimum charge
 Surcharge
 Commodity
 Freight-All-Kind (FAK)
 Demurrage Chi phí áp dụng cho ng thuê khi lưu giữ cont qá thời hạn miễn phí cho phép
- demurrage: dùng trong bãi cont (inside)
 Detention
- detention: dùng ngoài bãi

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MODES OF TRANSPORT

 Air
 Package carrier chuyển phát nhanh

 Road
 Rail
 Water vận chuyển đường thủy nội địa (inland waterway), dọc bờ biển (coastal shipping), ocean transport

 Pipeline vận chuyển khí

INTERMODAL & multi-modal: liên phương thức và đa phương thức

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ATTRIBUTES AFFECTING THE CHOICE OF TRANSPORT MODE

 Cost
 Speed
 Reliability
 Capability
 Capacity
 Flexibility
 Value of materials
 Importance
 Security
 Special facilities available
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CONTAINER & ULD

Avg Tare Avg Max Avg Max Avg Max Dimension (LxWxH)
Cont. Type
Weight (tons) Weight (tons) Cargo Volume (cbm) Feet - Meter
45 HC 4.2 28.0 23.8 85.0 45’ x 8’ x 9’6” 13.5 x 2.4 x 2.8
40 HC 3.7 27.0 23.3 75.0 40’ x 8’ x 9’6” 12 x 2.4 x 2.8
40 DC 3.5 27.0 23.5 67.0 40’ x 8’ x 8’6” 12 x 2.4 x 2.5
20 DC 2.4 21.0 18.6 33.0 20’ x 8’ x 8’6” 6 x 2.4 x 2.5

unique load
devices : máy
bay -> fix mbay

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Source: vietnamairlines
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DIRECT SHIPMENT NETWORK TO A SINGLE DESTINATION

từ supplier direct đến ng mua

Source: Chopra and Meindl (2016)

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DIRECT SHIPPING WITH MILK RUNS ship tuần tự

Source: Chopra and Meindl (2016)

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ALL SHIPMENTS VIA INTERMEDIATE CENTER WITH STORAGE/CROSS-DOCKING

Source: Chopra and Meindl (2016)

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SHIPPING VIA DC USING MILK RUNS

Source: Chopra and Meindl (2016)

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INTRODUCTION TO LINEAR PROGRAMING – EXERCISE 1

A model consists of linear relationships representing decisions, given

an objective and resource constraints

Resource Requirements
Labor Clay Profit
Product (hr./unit) (kg/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50
40 hrs of labor available per day
120 kgs of clay

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MODEL (EXERCISE 1)

 Decision variables tìm biến quyết định

 Objective function
hàm mục tiêu
 Constraints = 40 + 50

1 +2 ≤ 40
4 +3 ≤ 120
, ≥ 0

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EXERCISE 2

A retailer ships smartphones from three warehouses to three stores on a

monthly basis. Each warehouse has an amount of supply per month, and
each store has a fixed demand per month. The retailer wants to know the
number of smartphones to ship from each warehouse to each store in order
to minimize the total cost of transportation.

Warehouse Supply (units) Unit transportation cost

1 300
2 200 To store
3 200 From warehouse A B C
1 $16 $18 $11
2 $14 $12 $13
Store Demand (units)
3 $13 $15 $17
A 150
B 250
C 200
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EXERCISE 3

A retailer ships smartphones from three warehouses to three stores on a

monthly basis. Each warehouse has a fixed supply per month, and each store
has a fixed demand per month. However, each store does not need to ship
smartphones to all three stores per month. Please find the number of
smartphones to be shipped from warehouses to stores in order to minimize
the total cost of transportation. minimize: 4525
Warehouse Supply (units) Unit transportation cost
1 150
2 175 To store
3 275 From warehouse A B C
1 $6 $8 $10
Store Demand (units) 2 $7 $11 $11
A 200 3 $4 $5 $12
B 100
C 300
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 CHAPTER 6 – DISTRIBUTION AND TRANSPORTATION
IN A SUPPLY CHAIN

THANK YOU!

‹#› Het begint met een idee