Item-Location Assignment to Responsiveness for Fulfilling Rush Demands in a Manufacturing Network

This study investigates the business impacts of sustainability and managerial insights in terms of the robustness of a logistics system. A mathematical optimization model and a distribution responsiveness index are developed in this paper. The index includes stocking distributiveness, transportation link diversity, and service level. The study identified a discontinuous relationship between costs and responsiveness through the operational decision of redistribution. Knowing this relationship will allow managers to determine the minimum investment to drive performance improvement and thus, make the best business-level decision at the appropriate moment. In a proper ratio of urgent to non-urgent, the advantage of item-reallocation will be emphasized if distribution responsiveness is better after its reallocation. After reallocation, the distribution center can achieve better distribution responsiveness with low inventory costs and total cost (R/C ratio). When transportation costs increase after item-reallocation, item-reallocation cannot obviously help the distribution center enhance responsiveness (R/C ratio). When fixed costs are low and facilities increase after item-reallocation, distribution responsiveness (R/C ratio) is likewise high regardless of item-reallocation.