A Multiple-Period Facility Location Model for Large-Scale Distribution Network Design Problems with Budget and Service Level Considerations

Abstract

This study aims to develop a multi-period distribution system design model that provides an integrated view of the various costs, service quality and budget concerns within the planning horizon, as well as computationally feasible methods for obtaining solutions in realistic situations. The key design decisions considered in each period are: the number and location of distribution centers in the system and the routing of shipments between distribution centers and customers. Multi-period distribution systems design requires an integrated view of facility costs and transportation costs, service quality as well as budget constraints within the planning horizon. A genetic-algorithm-based approach is proposed as the solution procedure to find the optimal sequence for locating distribution centers over the planning horizon. The quality of solutions to test problems is analyzed and compared with the optimal solutions obtained from the commercial software Lingo 11.0.