The Cost, Capacity-utilisation, and Location Implications of Choice of Distribution Networks: A Simulation-based Decision Approach

Purpose: This research aims to assess the cost and capacity-utilisation implications of different simulated distribution networks so that it can develop a strategy model for enhancing distribution network performance. Design/Methodology/Approach: A case study is used to evaluate the impacts of cost and capacity-utilisation. To achieve this, it identifies and discusses the impacts on 5 designated scenarios with the adoption of simulation approach. Findings: The high variable rates of demands are the cause of the higher cost and uncertain utilisation. Logistics networks are changed, as result of which the logistics performances are different. Research Implications/Limitations: Simulation could be a cost-effective approach to improve logistics performance. But in fact it may not be able to simulate entire enterprises’ operation in practical application. Originality/Value: Formulating a logistics strategy model is the valuable ideal for improving logistics performance. Feasible scenarios which determined by “trade-off” are applied to 8 attributes within the model. Key Words: Distribution Strategy, Network Design, Network Cost, Risk-pooling, Site Location Strategy, Simulation, Vehicle Routing, Vehicle UtilisationBusiness Schoo