APPLYING MIXED INTEGER PROGRAMMING TO THE DESIGN OF A DISTRIBUTION LOGISTIC NETWORK
DOI:
https://doi.org/10.23055/ijietap.2006.13.2.438Keywords:
Location allocation problem (LAP), facility location (FL), international facility location (IFL), supply chain management (SCM), logistic networkAbstract
Facility location (FL) and production/distribution planning are two of the most significant operational and competitive
decisions for modern companies who operate worldwide. The objective of this study was the development and application
of a set of mathematical programming models for both the design and management of a multi-stage distribution system to
meet the continuous and tremendous pressure on companies to be flexible, competitive, and reduce production and logistic
costs. The generic location allocation problem (LAP) belongs to the class ofNP-hard complexity problems. It is based on
the placement of one or more facilities (the location problem) in optimum locations and on th.e concurrent assignment of
customers to them (the allocation problem) in the best possible way. This requires the maximization of facility utilization,
minimization of global costs, maximization of profit and service levels, and finally, it must respect a large set of physical
and management constraints operating in the supply chain.
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