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GFA Cold Chain (Multi-Echelon)

Drugstores executive management decided to rent new facilities for its cold chain. Effective supply chain management is a complex task, which presupposes keeping inventory policies balanced, while cutting operational costs, including transportation and distribution expenses. That’s why drugstores executive management decided to rent new facilities for its cold chain.

This problem can be solved by following the steps below:

  1. Greenfield Analysis
  2. Multi-Echelon Greenfield Analysis
  3. Safety Stock Estimation
  4. Risk Analysis

With the aid of Greenfield analysis, we estimated the number of regional sites and their locations (considering the maximum distance between drugstores and facilities). The next step is a multi-echelon GFA. This experiment allows to find optimal number of distribution centers as well as define the approximate locations for the supply chain sites with minimum input data:

  • First echelon sites locations
  • Customers locations
  • List of products
  • Aggregated demand for each customer

We consider a supply chain in England comprising:

  • 100 drugstores located in the largest cities

Demand for the following drugs is of periodic nature:

  • Antihistamines
  • Vitamins
  • Stomachic medications
  • Cardiac medications
  • Analgesics
  • Reliever medications
  • Ophthalmic
  • Neurological drugs
  • Cold medicines

Find location for the distribution center, which will supply regional sites.


The result of the experiment contains distribution center located near Milton Keynes.

The data on product flows, distance coverage by demand, and demand coverage by distance is shown in the corresponding tables.

  • Product Flows - shows detailed statistics on the flows of the supply chain within the specified period of time.
  • New Site Locations - Shows information on all the new sites created by the experiment.
  • Distance Coverage by Demand - shows detailed statistics on the distance to cover to satisfy a certain percentage of the demand.
  • Demand Coverage by Distance (and total demand) – shows detailed statistics on the demand to satisfy within a certain distance per site created by the GFA experiment.
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