Routing and facility location optimization in a dairy products supply chain

Abstract

Routing and facility location optimization is an important aspect of supply chain management. This is because the problem of determining which facilities within a supply chain echelon should cost-effectively supply products to facilities in the next echelon is usually encountered by supply chain managers and analysts. In this paper, a linear programming model for supply chain routing and facility location optimization has been proposed. The model can be solved using the PuLP optimization library implemented in Python programming language. The model has been applied to a small dairy products supply chain to determine the most cost-effective routes for products in the supply chain. The optimization results proffered the optimal contribution of each factory warehouse to each distribution warehouse in order to satisfy distribution warehouse demand while minimizing costs. The results of the study indicated that the model is efficient in solving the routing and facility location optimization problem usually encountered in supply chain management. Therefore, this study will aid supply chain analysts and managers in determining the most cost-effective route for distributing products between echelons or stages of supply chains under study.