Journal
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Volume 52, Issue 7, Pages 1897-1910Publisher
TAYLOR & FRANCIS LTD
DOI: 10.1080/00207543.2013.787171
Keywords
distribution; consolidation; inventory; genetic algorithm; facility location
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We consider the problem of designing a distribution network for a logistics provider that acquires products from multiple facilities and then delivers those products to many retail outlets. Potential locations for consolidation facilities that combine shipments for cost reduction and service improvements are considered. The problem is formulated with direct shipment and consolidation opportunities. A novel mathematical model is derived to solve a complex facility location problem determining: (i) the location and capacity level of warehouses to open; (ii) the distribution route from each production facility to each retailer outlet; and (iii) the quantity of products stocked at each warehouse and retailer. A genetic algorithm and a specific problem heuristic are designed, tested and compared on several realistic scenarios.
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