The facility location problem in the steel industry: a case study in Latin America

In this article, we present a case study in a complex and diversified multinational steel company using a deterministic formulation for a capacitated location problem based on a model discussed in the literature. The objective is to determine the quantity and location of distribution centres needed to serve a customer base within specified service levels. A large amount of data about the existing distribution network is gathered and modelled. A decision support system based on mixed-integer programming was used to solve the problem. One of the main contributions of this article concerns the manipulation of a large real database to extract enough information to obtain an acceptable model to solve a complex problem of a steel industry based on adaptations and improvements of a model offered in the literature.