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Simultaneous siting and sizing of distribution centers on a plane

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  • Simin Huang
  • Rajan Batta
  • Rakesh Nagi

Abstract

The benefits of simultaneous consideration of siting and sizing of distribution centers have been well acknowledged in supply chain design. Most formulations assume that the potential DC sites are known and the decision on location is to select sites from the finite potential DC sites. However, the quality of this discrete version problem depends on the selection of potential DC sites. In this paper we present a planar version of the problem, which assumes that there is no a priori knowledge of DC sites and DCs can be located anywhere in the plane. The goal of the problem is to simultaneously find locations and sizing of DC sites. The solution of the planar problem provides a lower bound for the discrete problem. The objective of the problem is to minimize the total of inbound and outbound transportation costs and distribution center construction costs—which include its fixed charge cost and concave sizing cost. The problem is initially formulated as a nonlinear programming model. We then reformulate it as a set covering problem after establishing certain key properties. A greedy drop heuristic and a column generation heuristic are developed to solve the problem. Computational experiments are provided. Copyright Springer Science+Business Media, LLC 2009

Suggested Citation

  • Simin Huang & Rajan Batta & Rakesh Nagi, 2009. "Simultaneous siting and sizing of distribution centers on a plane," Annals of Operations Research, Springer, vol. 167(1), pages 157-170, March.
    • Handle: RePEc:spr:annopr:v:167:y:2009:i:1:p:157-170:10.1007/s10479-008-0376-4
    DOI: 10.1007/s10479-008-0376-4
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    References listed on IDEAS

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    1. Simin Huang & Rajan Batta & Kathrin Klamroth & Rakesh Nagi, 2005. "The K-Connection Location Problem in a Plane," Annals of Operations Research, Springer, vol. 136(1), pages 193-209, April.
    2. Leon Cooper, 1963. "Location-Allocation Problems," Operations Research, INFORMS, vol. 11(3), pages 331-343, June.
    3. Mazzola, Joseph B. & Neebe, Alan W., 1999. "Lagrangian-relaxation-based solution procedures for a multiproduct capacitated facility location problem with choice of facility type," European Journal of Operational Research, Elsevier, vol. 115(2), pages 285-299, June.
    4. Zuo-Jun Max Shen & Collette Coullard & Mark S. Daskin, 2003. "A Joint Location-Inventory Model," Transportation Science, INFORMS, vol. 37(1), pages 40-55, February.
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    Cited by:

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