Multi-criteria optimization for the location problem of distribution centers of a company with production plant in the Industrial Pole of Manaus

Abstract

This paper presents a mathematical model applied to a real problem of location of distribution centers in the northeast region of Brazil for an industry that has all its production in a remote region of the country. The model considers decision criteria not jointly applied in the scientific literature. Specifically, we propose a mixed-integer linear programming model that considers three layers, two types of modals, capacity constraints, fixed and variable facility costs, and multiple criteria such as operating and investment costs, level of service, society impact, and operational issues for the value function assigned to each solution. The model allows the determination of the best locations for distribution centers and which modal should be used for its supply to maximize the value of the solution. The application of the model resulted in different solutions with high values of objective functions. The results were obtained using real data and a solution with 39% value improvement compared with the current logistic structure was found.

Keywords:
Facility location/location analysis; Multi-criteria decision; Integer linear programming