Optimal model for warehouse location and retailer allocation

Abstract

SUMMARYWarehouse location and retailer allocation is a high-level strategic decision problem that is commonly encountered by logisticians and supply chain managers, especially during the supply chain design phase. Considering the product distribution cost and warehouse capital cost trade-offs, this paper models the warehouse location and retailer allocation problem as a 0-1 integer programming problem and provides an efficient two-stage set covering heuristic algorithm to solve large-sized problems. Finally, concluding remarks and some recommendations for further research are also presented.

Depo Yeri Seçimi: Perakende Sektöründe Melez Çok Kriterli Karar Verme Uygulaması

“…Aghezzaf (2005), belirsiz taleplere sahip tedarik zincirleri için planlar geliştirmek üzere kapasite planlaması ve depo yeri problemini çözmek amacıyla karma-tamsayı programlama modelini kullanmıştır. Gill ve Bhatti (2007) depo yeri ve perakendeci tahsisi problemini 0-1 tamsayı programlama problemi olarak modellemiş ve büyük boyutlu problemleri çözmek için sezgisel algoritmayı kapsayan iki aşamalı bir çözüm sağlamışlardır. Brahimi ve Khan (2014) üretim, envanter ve dağıtım kararları ile depo yeri seçimi için karma tamsayı programlama modelini kullanmışlardır.…”

Factors determining distribution structure decisions in logistics: a literature review and research agenda

“…Various terms are used for the distribution structure analysise.g. "modelling DC network scenarios" (CWS Consulting Group et al, 2011) or "determine the number of DCs" (Gill & Ishaq Bhatti, 2007). .…”

“…McKinnon (1984) 1) Marketing channel selection 2) Logistics channel analysis (nodes, areas, routes) 3) Logistics channel choice Ashayeri and Rongen (1997) 1) Goods flow analysis 2) Goods flow scenarios 3) Physical distribution costs analysis 4) Minimal transport costs per mode and country 5) Determination potential DC locations based on goods flow scenarios 6) Optimisation DC location choice 7) Evaluation (sensitivity analysis) Chuang 20021) Community location requirements survey 2) Confrontation requirements and location characteristics 3) Quality Function Deployment Gill and Ishaq Bhatti (2007) 1) Determine the number of DCs 2) Determine DC locations 3) Capacity allocation per DC CWS Consulting Group et al 20111) Business strategy 2) Modelling DC network scenarios 3) Location screening (weighted ranking) 4) Field validation (on-site) 5) Discussion and negotiation Korpela and Tuominen (1996) Analytic Hierarchy Process decision aid: 1) Problem definition 2) Possible warehouse locations 3) Qualitative criteria and logistics cost analysis 4) Best alternative (cost benefit ratio) van Thai and Grewal (2005) Three step prescriptive DC location decision-making model: 1) Selection geographic area 2) Potential locations 3) Determine location choice by distribution costs optimisation practice, such strategic decisions usually take multiple decision-making and negotiation rounds. Each round influences the decision outcome (Koppenjan & Klijn, 2004 Korpela and Tuominen (1996) and van Thai and Grewal (2005) include prescriptive models to select DC locations, but do not include the broader distribution structure choice (centralised/decentralised).…”

Demand and supply chain planning in grocery retail: an operations planning framework

“…Network planning includes strategic procurement logistics, warehouse design, distribution planning and outlet planning. As a result, network planning constitutes the form, structure and efficiency of the whole retail SC, and therefore shapes the entire Supply chain planning in grocery retail enterprise (Gill and Bhatti, 2007). That is why network planning needs to be embedded in the environment, and tailored to the retailer's overall philosophy and strategy.…”