You are creating a model for a manufacturing company with four major plants and ten warehouses. They want to reduce costs by determining the optimal number and location of the plants and warehouses. During the initial set of meetings, one of the team members is very concerned about modeling the “samples” that the firm sends out. As part of the marketing of the product, the firm sends out quite a bit of sample product. This product is pulled from the plants or warehouses and shipped to customers via small-parcel. It accounts for about 10% of the demand records (and about 0.5% of the demand volume) and about 3% of the logistics costs. Should you include this part of the business in the model?

  • CreatedOctober 29, 2015
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