Continuing with our investigation of the locations of fulfillment centers for optimal network design, we now consider what happens if we focus on minimizing average delivery time. Once again, we're using UPS data, and minimizing a weighted average of delivery cost and delivery time. If the weights are in a 1:1000 ratio (much higher weightage on time), then it turns out that a network with a single FC should locate that FC in Chicago, instead of in the Tennessee/Kentucky area.
With 5 FCs, the network looks as follows:
For comparison, the 5-FC network that minimizes cost looks like this:
They're not all that different, partly because we're using UPS costs and UPS times in both cases, and obviously those two are highly correlated. More coming up, as we continue this analysis with changing weights on cost and time.
[- Research by Jackie Zhang]