Network Design:Key Issues The objective is to balance service level against Production/purchasing costs Inventory carrying costs Facility costs (handling and fixed costs) Transportation costs That is,we have to find a minimal-annual-cost configuration of the distribution network that satisfies customer demands at specified service levels.Network Design: Key Issues „ The objective is to balance service level against „ Production/ purchasing costs „ Inventory carrying costs „ Facility costs (handling and fixed costs) „ Transportation costs That is, we have to find a minimal-annual-cost configuration of the distribution network that satisfies customer demands at specified service levels