Optimization models for the dynamic facility location and allocation problem

The design of logistic distribution systems is one of the most critical and strategic issues in industrial facility management. The aim of this study is to develop and apply innovative mixed integer programming optimization models to design and manage dynamic (i.e. multi-period) multi-stage and multi-commodity location allocation problems (LAP). LAP belong to the NP-hard complexity class of decision problems, and the generic occurrence requires simultaneous determination of the number of logistic facilities (e.g. production plants, warehousing systems, distribution centres), their locations, and assignment of customer demand to them. The proposed models use a mixed integer linear programming solver to find solutions in complex industrial applications even when several entities are involved (production plants, distribution centres, customers, etc.). Lastly, the application of the proposed models to a significant case study is presented and discussed.