Abstract
In this paper, dynamic dairy facility location and supply chain planning are studied through minimizing the costs of facility location, traffic congestion and transportation of raw/processed milk and dairy products under demand uncertainty. The proposed model dynamically incorporates possible changes in transportation network, facility investment costs, monetary value of time and changes in production process. In addition, the time variation and the demand uncertainty for dairy products in each period of the planning horizon is taken into account to determine the optimal facility location and the optimal production volumes. Computational results are presented for the model on a number of test problems. Also, an empirical case study is conducted in order to investigate the dynamic effects of traffic congestion and demand uncertainty on facility location design and total system costs.
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