Facility Location Analysis is Just the Beginning (If you Do It Right)

The question How many warehouses should we have: is deceptively simple because a proper answer requires answering, at the same time, a host of interdependent questions. We think that this calls for a comprehensive distribution planning model with optimization capability. Such a managerial tool can be used to deal not only with warehouse location questions, but also with a variety of additional management questions. With this approach, the seed provided by the facility location issue can hear fruit of added utility far beyond original expectations. The authors' experience is that this full potential is seldom achieved in practice without deliberate efforts to remove the block caused by the usual narrow focus on “just” locating facilities.