Open AccessA distribution network design for fast-moving consumer goods
Author(s) -
O.A. Okunade,
SA Daodu
Publication year - 2021
Publication title -
nigerian journal of technology
Language(s) - English
Resource type - Journals
eISSN - 2467-8821
pISSN - 0331-8443
DOI - 10.4314/njt.v39i4.11
Subject(s) - intermediary , routing (electronic design automation) , distribution (mathematics) , network planning and design , supply chain , supply chain network , computer science , linear programming , operations research , mathematical optimization , supply chain management , business , engineering , computer network , mathematics , marketing , mathematical analysis
A distribution network design of fast-moving consumer goods ensures distribution of products in an effective manner by giving maximum customers’ satisfaction and minimum distribution cost. The study evaluates the distribution through direct shipment and the use of intermediate shipment for distribution of products from plant to depots. A real-life case study in Southwestern Nigeria was defined and solved as a linear programming model to minimise total cost of distribution from plant to the depots with consideration of four routing options. The results show that distribution through intermediaries gives a better solution than routing option with direct shipment. The best routing option with intermediate points when compared with the routing option with direct shipment gives a savings of 1,819,490.00 Naira which translates to 13.46% cost savings. The study shows that the location of intermediaries is a key decision in distribution network design and that the intermediaries add value to the distribution networks in supply chain.
Keywords: Distribution network; Supply chain design; Fast-moving consumer goods; Linear programming