Strategic network planning for an international automotive manufacturer

This article addresses the strategic network planning for international automotive manufacturers, in particular of premium cars. The focus is on the product to plant allocation and capacity expansion decisions for a given network design with fixed plant locations. A mixed integer program minimizing the net present value (NPV) of all capital expenditures and operational cost while incorporating flexibility of a network by a specific allocation structure (“chain”) is formulated. Computational illustrations on the influence of flexible allocation structures on the NPV are demonstrated considering changes in demand, exchange rates and total available capacity.

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