ABSTRACT
This chapter deals with the question of whether a company needs one or more distribution centres for optimal distribution of goods flows. The European headquarters in the Netherlands is consolidating product demands and ordering centrally from plants. Although the European Union countries have been striving to achieve one single market for many years, the intention of the Member States have not achieved the desired results. The decoupling point concept provides insight into the working method to be selected. The organisation can determine the correct working method based on customer, product and process characteristics. The international distribution centre, which supplies customers in various countries is a hybrid of the methods. When taking into account the integral cost of distribution logistics, the company will make a trade-off analysis between cost of transportation, cost of warehousing and cost of inventory. Site selection is likely to be influenced by corporate customer service policy.
