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allows them to be applied to an LND problem of a manufacturer as well as of a
logistics service provider under appropriate set, parameter, and variable definitions.
In this section, four applications from different sectors are discussed. Sec-
tion
16.4.1
presents the network design problem of a global beverage company.
Many companies utilize logistics service providers in their distribution networks.
In Sect.
16.4.2
an application from this area is provided. Section
16.4.3
is devoted
to an atypical application in LND arising in organ transportation. The problem has
additional features resulting from the nature of the good being transported. Finally,
Sect.
16.4.4
illustrates an application for waste electrical and electronic equipment.
16.4.1
Logistics Network Design of a Beverage Company
Beverage companies usually operate bottling factories in which the required
materials are mixed, bottled, and then packaged to be shipped to end users. Global
companies usually need to import some of the input materials, like flavors and
syrups, to guarantee the same quality worldwide. Moreover, ingredients may also
be provided by local suppliers. Thus, inbound logistics involves both international
and national shipments to the manufacturing plant. In turn, the outbound flow from
the plant comprises bottled and packaged beverages ready to consume. The flow of
end products may also be targeted at neighboring countries, thus involving again
national and international shipping. The schematic representation of the logistics
network, which is a specialized version of Fig.
16.1
,isgiveninFig.
16.5
.
The main decisions in this LND problem include the location of new distribution
centers (DCs) and the choice of transportation channels for the inbound and
outbound flows of these DCs. As can be seen from Fig.
16.5
, the manufacturer
may choose to operate additional DCs closer to the customs area to ease the overall
customs process. Certain beverages are not produced in every country. Thus, there is
a bottled beverage flow from the customs area towards DCs for those products that
are not manufactured in a country. Shipments to international customers (via the
customs) mainly consist of products that are produced in the local country and they
will constitute the in-country product flow in the LND problems of other countries.
Observe here that, in addition to finding the locations of DCs and deciding on the
transportation structures to use, the LND problem also includes routing decisions
for deliveries to the customers (see the dashed lines in Fig.
16.5
). Typically, a global
beverage company resorts to logistics service providers to handle the distribution of
orders to end users. The service provider operates its own logistics network, which
will be detailed in the next subsection. Apart from location and routing decisions, a
typical beverage company also questions:
the level of inventories at the DCs,
the need for consolidation; some examples include consolidation on the route and
consolidation at the facility,
