Assumptions definition and review build on the situation analysis, project objectives, constraints and measurements standards. For planning purposes, the assumption defines the key operating characteristics, variables and economies of current and alternative systems. Assumptions generally fall into three classes:
Business assumptions – They define the characteristics of the general environment including relevant market, consumer, and product trends and competitive actions, within which an alternative logistics plan must operate. They are generally outside the ability of the firm to change.
Management assumptions define the physical and economic characteristics of the current or alternative logistics environment and are generally within the firm’s ability to change or refine. Typical assumptions include a definition of alternative distribution facilities, transport modes, logistics processes and fixed and variable costs.
Analysis assumption defines the constraints and limitations that must be included to fit the problem to the analysis technique. These assumptions frequently concern problem size, degree of analysis detail and solution methodology.