The Multi-criteria Decision Support in Choosing the Efficient Location of Warehouses in the Logistic Network

Abstract

The warehouse facilities location is a complex multi-objective decision problem. In order to determine this location one can use a different mathematical models that describe the location according to the accepted constraints and criterion functions. This paper presents the warehouses location in the logistic network. The logistic network consists of suppliers, potentially warehouses with the known location and recipients. The variety of constraints that must be considered e.g. the production capacity of suppliers, buyers, the storage capacity makes it difficult to decide on the final location of objects of the logistic network. The warehouse location problem in the logistics network is multi-criteria optimization problem that depends on quantitative and qualitative criteria. In general, the optimization criteria takes the form: minimal storage costs, transition costs of the cargo through warehouse facilities, the cost of cargo transport to the warehouse facility, etc. The complexity of the warehouse location problem dictated by the diversity of constraints and decision variables (e.g. the type of binary decision variables and the real type of variables), the search for the location of many warehouse facilities at the same time, multi-criteria aspects of the problem imposes the need for the application of an appropriate optimization algorithm adequately to the presented location problem. The genetic algorithm is a practical optimisation tool solving many difficult decision problems. It should be underlined that in complicated problems this tool does not guarantee the optimal solution, but sub-optimal. Despite that, the quality of the solution is accepted by decision-makers.