Optimizing Locations and Scales of Distribution Centers under Uncertainty

Lu Zhen, Weirong Wang, Dan Zhuge

Research output: Journal article publicationJournal articleAcademic researchpeer-review

7 Citations (Scopus)

Abstract

In supply chain networks of large companies, how to determine the location for establishing distribution centers is an important strategic-level decision problem. This paper proposes a stochastic programming model to determine distribution centers' locations as well as their scales. The objective of the model is to minimize the expected total transportation cost under uncertain demands of customers. An improved particle swarm optimization algorithm and a Lagrangean relaxation-based solution approach are proposed to solve the model. This paper also performs a case study on applying this model to the largest retailer in China. In addition, some numerical experiments are conducted to validate the effectiveness of the proposed model and the efficiency of the proposed solution methods.

Original languageEnglish
Article number7428960
Pages (from-to)2908-2919
Number of pages12
JournalIEEE Transactions on Systems, Man, and Cybernetics: Systems
Volume47
Issue number11
DOIs
Publication statusPublished - Nov 2017

Keywords

  • Distribution centers
  • facility location
  • Lagrangean relaxation
  • particle swarm optimization (PSO)
  • stochastic programming

ASJC Scopus subject areas

  • Software
  • Control and Systems Engineering
  • Human-Computer Interaction
  • Computer Science Applications
  • Electrical and Electronic Engineering

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