261 / 2024-04-23 21:56:18

Distribution Network Design Problem Considering Warehouse Types: Framework, Model, and Algorithm

Distribution network design,multi-objective optimization,warehouse types,heuristic algorithm,decision-support framework

With the rapid development of e-commerce, enterprises need to improve their distribution networks to accommodate the increasing requirements regarding the quality of customer service and the rising costs of the logistics. We investigate a distribution network design problem involving various types of warehouses. Unlike traditional network design problems, where the candidate locations of the distribution centers or the retailers are given, the types of the warehouse are also decision variables in our model. We first propose a decision support framework to summarize the key steps in the practical implementation of the distribution network design problem. Then, we propose a general mathematical model for this problem, where the objectives are to minimize the total logistical costs and to maximize the fulfillment rate of on-time delivery. Possible extensions for some application scenarios to accommodate the decision support framework are also discussed. To solve the problem, we propose a two-layered heuristic algorithm, where the outer-layer algorithm optimizes the location decisions, and the inner-layer algorithm constructs the links between the nodes of the network. With this algorithm, it is practical to accommodate the constraints and requirements from the operational level.  Numerical studies show that the performance of the proposed method is close to the results derived from a commercial solver when solving simplified problem instances. We also illustrate how the proposed method is used in a real case study regarding a household appliances enterprise in China.