Final answer:
Facilities represent the terminal node level closest to the service point, playing a crucial role in distribution networks by minimizing transportation costs, and storage expenses, and improving delivery times.
Step-by-step explanation:
Facilities represent the terminal node level closest to the service point. The terminal node in a distribution network is the last step before goods are transferred to their final destination, such as a retail outlet or customer. This level includes regional warehouses, distribution centers, and retail outlets, each playing a critical role in ensuring the efficient flow of goods from suppliers to end-users.
In logistics and supply chain management, the terminal node is designed to be in close proximity to the customer base for speed and efficiency in delivery services. The network's configuration, including its terminal nodes, is strategically planned to minimize transportation costs, storage expenses, and delivery times. By optimizing the terminal nodes, companies can improve customer satisfaction through faster delivery times and increased product availability at the local level.