A network design problem for a post sale services distribution system

Official URL: http://risc01.sabanciuniv.edu/record=b1606642 (Table of Contents)

Post sale services network design problem addresses the design of the customer support network. This includes determination of the number and capacity of the facilities, assignment of repair vendors to these facilities, transportation mode between facilities and repair vendors and hierarchical structure of the network. In this study, a household appliance manufacturer’s post sale network design problem is addressed. We present a mixed integer linear programming problem formulation with the single objective of minimizing the total network cost which includes the opening and operating costs of facilities and transportation costs. Using 2013 data provided by manufacturer, we estimate the parameters and scale down the input data of the problem by various aggregation and consolidation techniques. We propose three alternative scenarios to test different configurations of the network and compare them with the existing scenario in terms of total cost and applicability. The scenario with minimum total cost among three scenarios is proposed. The improvement of the proposed scenario is 12% reduction in total costs.