Question: A distributor has four distribution centres (DCs) in a region that receive supplies for eight types of products from eight different supply sources. Trucks have

A distributor has four distribution centres (DCs) in a region that receive supplies for eight types of products from eight different supply sources. Trucks have a capacity of 40,000 units and cost ₹75,000 per load plus ₹10,000 per delivery. Thus, a truck making two deliveries charges ₹95,000. The cost of holding one unit in inventory at a DC for a year is ₹25. The logistics manager is considering whether to use direct shipping from suppliers to the DCs or setting up milk runs from suppliers to DCs.

a) What network do you recommend if annual requirement for each product at each DC is 720,000 units?

b) What network do you recommend if the requirement for each product at each DC is 120,000 units?

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