DESIGNING A DISTRIBUTION NETWORK FOR HIGHLY DEMANDED COMMODITYCASE OF SOUTH SPRING WATER IN SIDAMA NATIONAL REGIONAL STATE

Abstract

A distribution is one of a key activity that has a direct impact on the success and the overall profitability of a given supply chain. If a distribution of a given product managed properly, it will have a great impact on both the success and customer satisfaction of a given SC. However, there are many manufacturing companies in Ethiopia, most of them do not have properly designed distribution network. This research is intended to design a new distribution network for a water bottling company located in Sidama National Regional State Arbegona Woreda..To distribute a given product in cost effective manner there should some decisions be made which include number of regional warehouses, location of regional warehouse and transportation cost to and from the regional distribution. So the research decides the number and the locations of regional distribution centers by utilizing FAHP method. After the locations of the RDCs found, a new distribution network will be proposed and the Transshipment was modeled based on a newly proposed distribution network and solved by using software package find out the optimum transportation cost. After the Transshipment model solved and optimum solution was found the cost effective RDCs was assigned to different demand locations in the region. Finally, the new cost effective distribution network diagram was developed and the cost of transportation was compared to the existing transportation cost of the company to cover all demand location and the newly designed network saves the company 13.7 million ETB annually which is being wasted due to ineffective distribution network