Operational planning models for distribution networks

Abstract

The design and optimisation of a logistic network deals with a wide set of decisions, e.g. the determination of the best location and capacity of the different logistic facilities (production plants, distribution centres, transit points, wholesalers, etc.), the allocation of the product demand coming from customers in presence (or absence) of fractionable flows of material, the determination of the best transportation mode (truck, rail, etc.) as well as loading and routing of vehicles. These decisions involve multiple stages of a distribution network: customers-regional distribution centres (RDC), RDCs-central distribution centres (CDC) and CDCs-production plants and sources, in presence of multiple products and the variable time (i.e. time-dependent product demand and flows of material). This paper presents a top-down methodology that joins the strategic planning, the tactical planning and the operational planning of distribution networks with a special focus on the development of effective heuristic methods to face the vehicle routing problem. Original models and heuristic algorithms for the operational planning are illustrated. The impact of the strategic and tactical decisions on the performance of the operational planning is evaluated by the application of the proposed hierarchical approach to two realistic case studies. Obtained results are illustrated in a what-if experimental analysis conducted on multiple problem settings and realistic scenarios.

Keywords:

• supply chain (SC)
• facility layout
• location allocation problem (LAP)
• vehicle routing
• transportation
• mixed integer linear programming
• decision support system (DSS)

Acknowledgements

The authors would like to thank the anonymous referees for their constructive input and comments, which served to improve the manuscript.