Abstract

Iman Niroomand, Akif Asil Bulgak and Tolga Bektas

Abstract : The Capacitated Warehouse Location consists of determining the number and locations of capacitated warehouses on a set of potential sites such that demands of predefined customers are met. Two typical assumptions in modelling this problem are: the capacity of warehouses is constant and that warehouses are able to fully satisfy customer demands. However, while these kinds of assumptions define a well structured problem from the mathematical modelling perspective, they are not realistic. In this paper we relaxed such constraints based on the fact that warehouses can be built in various sizes and also warehouses can put in orders for unsatisfied customers' demand directly to the manufacturing plant with additional costs. This flexibility can lead to best decision making ability for managers and supply chain specialists to decide between higher capacity level with higher fixed and variable costs at the warehouse or direct ordering from the manufacturing plant. A nonlinear integer programming (NIP) formulation with staircase costs for multiple commodities in supply chain network is presented, which is then transformed into an integer linear programming (ILP) formulation. Computational results of comparisons between the two formulations and of further experiments using the integer linear formulation are presented.

Keywords : multi-commodity facility location; staircase costs; supplies chain network design

Year : 2011
Issue : 1
Volume : 4