A two-phase model for resilient hub and mobile distribution centers location

Abstract

Hub location is crucial for resilient and uninterrupted supply chain operations, particularly during disruptions or unforeseen events. In this paper, we propose a resilience hub location framework for Third Party Logistics (3PL) companies with two key objectives: optimizing demand flows and establishing a resilient network capable of with-standing sudden disruptions. The study aims to identify the key criteria that contribute to the successful implementation of the resilient center. The proposed structure utilizes a two-phase decision-making methodology. The first phase presents a new Multi-Criteria Decision-Making (MCDM) approach called SWARA-EDAS method that evaluates and ranks potential locations based on resiliency criteria. The second phase proposes an optimization model to determine the optimal hub location. To illustrate the approach, a real-world case study of a 3PL company in Tehran is included. Due to the absence of precise demand data in the case study, a novel clustering approach is proposed to estimate the demand flow. Each individual cluster can be considered as a distinct demand point, and a clustering analysis involving 122 regions within Tehran is conducted, taking into account various factors such as population, economic index, accessibility to the Internet, and number of business units. To enhance the resiliency of the network, mobile distribution centers are also deployed. These mobile centers not only provide flexibility but also serve as backup capabilities in the event of a disruption or failure at the fixed hub. The proposed structure offers practical in-sights for 3PL companies seeking to implement a resilient network structure.