Abstract
The problem of locating distribution centers is one of the most important issues in design of supply chain. The design of the distribution system is an important issue for almost every company. Wide range of problems arising in practical applications can be formulated as Mixed-integer nonlinear Models. Multi-commodity distribution system design is a generalization of a facility location problem where we have several commodities, and shipment from a plant to customer occurs through a distribution center. This report presents a real life distribution problem. The problem is to determine which distribution centers to use so that all customer demands are satisfied, production capacities are not exceeded, and the total distribution cost that is the fixed cost of operating the distribution center and the transportation cost is minimized. A computer program (Software R) is developed to obtain the optimal solution.
Highlights
Today, global marketing and manufacturing is developing rapidly
Multi-commodity distribution system design is a generalization of a facility location problem where we have several commodities, and shipment from plant to customer occurs through a distribution center
Wafers biscuit, extruded snacks and many more products are produced in this plant. This problem involves the transportation of a truckload of their products from a plant to seven distribution centers, and to 15 customers at a minimum transportation cost in Sri Lanka
Summary
Global marketing and manufacturing is developing rapidly. With this rapid development, competition among manufacturing companies becomes more severe. Manufacturing products, shipping products into warehouses and delivering products to customers is very difficult today. Every company is looking for a logistic system to balance the overall supply chain of the company. Deciding locations of distribution centers are the most difficult part in supply chain management because inefficient locations will result in excess cost. Management should recognize the future conditions when making facility location decisions. Multi-commodity distribution system design is a generalization of a facility location problem where we have several commodities, and shipment from plant to customer occurs through a distribution center
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