An evaluation of new heuristics for the location of cross-docks distribution centers in supply chain network design

Abstract

This paper addresses an evaluation of new heuristics solution procedures for the location of cross-docks and distribution centers in supply chain network design. The model is characterized by multiple product families, a central manufacturing plant site, multiple cross-docking and distribution center sites, and retail outlets which demand multiple units of several commodities. This paper describes two heuristics that generate globally feasible, near optimal distribution system design and utilization strategies utilizing the simulated annealing (SA) methodology. This study makes two important contributions. First, we continue the study of location planning for the cross-dock and distribution center supply chain network design problem. Second, we systematically evaluate the computational performance of this network design location model under more sophisticated heuristic control parameter settings to better understand interaction effects among the various factors comprising our experimental design, and present convergence results. The central idea of the paper is to evaluate the impact of geometric control mechanism vis-a-vis more sophisticated ones on solution time, quality, and convergence for two new heuristics. Our results suggest that integrating traditional simulated annealing with TABU search is recommended for this supply chain network design and location problem.