Explain Importance of Logistic Network Design.
Ans.   ·       Considering the rate at which the business environment is changing, CO logistics facilities are under pressure to keep current changes.
·       In many companies, change has happened recently or is scheduled for the near future.
·       With capital being both scarce and expensive, facilities decisions become more important.
·       Critical variables in network design :
v     Changing Customer Service Requirements
v     Shifting Locations of Customer and/or Supply Markets
v     Change in Corporate Ownership
v     Cost Pressures
v     Competitive Capabilities
v     Corporate Organizational Change
Changing customer service requirements :
·       A customer’s requirement has changed and the company may need to change some aspect of its service to those customers.
·       Some customers will be looking for small lead time and low cost so the organization can achieve this only when its network is good.
Shifting locations of customer and/or supply markets :
·       Geographic locations of markets often shift over time and the company needs to position its logistics network to be responsive to these shifts.
·       E.g. when suburbs of Mumbai became densely populated with good purchasing power, companies strengthened their networks in these areas. Flights for Mumbai to other cities in Maharashtra are also the example of changing market dynamism.
           Change in corporate ownership           :
·       Mergers and consolidations may need new logistics and market patterns for the surviving in the market.
·       Or the change in corporate policy such as the addition or deletion of a product will lead to have a good logistical network.
Cost pressures :
·       As competition increases, firms must seek ways to continue growth.
·       One such way is to find areas where the costs of key business processes can be reduced.
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