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CHAPTER FIVE ------------------------------- Network Design in the Supply Chain 5.1 The Role of Network Design in the Supply Chain 5.2 Factors Influencing Network Design Decisions 5.3 A Framework for Network Design Decisions 5.4 Models for Facility Location and Capacity Allocation 5.5 Making Network Design Decisions in Practice 5.6 Summary of Learning Objectives Discussion Questions Exercises Bibliography Case Study Managing Growth at SportStuff.com Learning Objectives After reading this chapter, you will be able to Understand the role of network design in a supply chain. Identify factors influencing supply chain network design decisions. 3. Develop a framework for making network design decisions. 4. Use optimization for facility location and capacity allocation decisions. In this chapter, we provide an understanding of the role of network design within a supply chain. We focus on the fundamental questions of facility location and capacity allocation when designing a supply chain network. We identify and discuss the role of various factors that influence the facility location and capacity allocation decision. We then establish a framework and discuss various solution methodologies for facility location and capacity allocation decisions in a supply chain. 5.1 THE ROLE OF NETWORK DESIGN IN THE SUPPLY CHAIN Supply chain network design decisions include the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility. Supply chain network design decisions are classified as follows Facility role What role should each facility play What processes are performed at each facility Facility location Where should facilities be located Capacity allocation How much capacity should be allocated to each facility Market and supply allocation What markets should each facility serve Which supply sources should feed each facility All network design decisions affect each other and must be