D E S I G N O F A D I S T R I B U T I O N N E T W O R K U S I N G A H U B L O C A T I O N M O D E L W I T H R E G A R D T O C A P A C I T Y C O N S T R A I N T S A N D S E R V I C E L E V E L
Author(s):
Abstract:
The system of transferring and storing a product from supplier to customer in the supply chain is called distribution. Keskinocak and Tayur (2001) established that the primary goal of supply chain management is to deliver the correct product to the correct place at the correct time, while maintaining cost efficiency. Designing a distribution network includes inventory holding, transportation and facilities, establishment costs and customer service. Distribution is one of the most important factors in the profitability of an enterprise because it affects supply chain cost directly. Increasing the number of distribution centers will increase inventory holding costs and decrease transportation costs and lead time for the customer. The hub location problem can be used in designing a distribution network. Hubs are special facilities that serve as switching, trans-shipment and sorting points in the distribution systems. Instead of serving each origin---destination pair directly, hub facilities concentrate flow in order to take advantage of he conomies of scale [20]. Hub-and-spoke networks are employed in various applications, such as cargo transportation, airline systems and telecommunication networks. Hub location problems deal with finding the location of hub facilities and the allocation of demand nodes to these located hub facilities. Hub network problems are divided into two categories; single allocation and multiple allocation. The difference between these two types is in the assignment of non-hub nodes to hubs. In single allocation, all the incoming and outgoing traffic of every demand center is routed through a single hub. In multiple allocation, each demand center can receive and send flow through more than one hub. In some research, only the allocation aspect was considered, but, it is important to know that optimal hub location is also effected by hub location. In this paper, we develop a MILP model for designing a istribution network using the hub location method, regarding hub capacity and service levels. The objective of this problem is minimizing transportation and construction costs.
Keywords:
Language:
Persian
Published:
Industrial Engineering & Management Sharif, Volume:30 Issue: 1, 2014
Pages:
131 to 136
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