Question

What must one keep in mind when determining the optimal logistics network design?

a) that the logistics network integrates inbound and outbound shipments to achieve the lowest transportation cost
b) that information sharing can lead to a significant reduction in order errors
c) that outbound transportation costs exceed inbound costs as the number of warehouse facilities increase
d) that the logistics network demonstrating the least total cost is the one that considers the tradeoffs among warehousing, inventory, and transportation costs as well as the cost of poor service
e) that all geographic areas served by a firm should report to a single executive order

Answer 1

To design an optimal logistics network, consider integration of shipments for transport cost efficiency, information sharing, trade-offs among different logistics costs and customer service impact. Weber's Location Model and global trends in transport and communication also play a critical role.

Step-by-step explanation:

When determining the optimal logistics network design, several key factors should be kept in mind. It is important to understand that transportation costs play a significant role, as do economies of scale. Not only should the design integrate inbound and outbound shipments to optimize transportation costs, but it should also include information sharing to reduce order errors and take into account the trade-offs among warehousing, inventory, and transportation costs, along with the impact on customer service. Moreover, accessibility to efficient transportation methods like uncrowded freeways or rail and water transport can greatly influence location decisions, as per the example of Weber's Location Model. Lastly, considerations of global trends such as improvements in shipping, computing, and telecommunications, which facilitate long-distance economic connections and drive down costs, are also essential.