Distribution Center Positioning and Territory Design in Supply Chain

Abstract

Objective: In this paper, we investigate a new optimization for territory design in the distribution system and allocation of the customers to supply centers which are considered as territory centers using MIP model. The objective is to balance the work load through minimizing the maximum differences the minimum customers allocated to the various centers. The study constraints guarantee continuity of the territories and the lack of gaps in the territories. Also, other constraints include allocation of a center to each territory and exclusive allocation of each customer to only one territory. Methods: Since, territory design and positioning are among NP-hard issues, in order to solve real-world case and big problems we have to propose meta-heuristic algorithms. For this purpose, in this paper, a grey wolf optimizer and a salp optimizer algorithm are proposed. Based on the literature review, it is very difficult to use encoding-decoding solution without any modifier algorithm. Therefore, we design a novel solution scheme based on a minimum spanning tree in order to obviate the complexities, guarantee the continuity of the territory structures and the lack of gaps, and generate feasible solutions. Results: Computational results on random instances showed that the proposed algorithms can effectively help to generate reasonable responses. Conclusion: The model proposed here could be a useful tool to aid the decision-making in distribution management, as well as for the better organization of any distribution.

Keywords

• territory design
• location
• distribution system
• mip model
• meta-heuristic algorithm