VARIOUS APPROACHES TO SOLVE UNCAPACITATED FIXED-CHARGE FACILITY LOCATION PROBLEM ON POSTAL NETWORK

Abstract

Availability and reliability of mail distribution services depends primarily on a network of postal operators. Choosing the appropriate layout of a network is key to maintaining quality while generating the lowest possible costs. This article focuses on creation of a postal network, based on an allocation model of an uncapacitated fixed-charge facility that considers road networks in the Slovak republic. A basic analysis of infrastructure is followed by incorporating service demands, and building and transport costs, in the chosen allocation model. Both construction and subsequent improvement heuristic algorithms are used to determine the number and location of postal sorting centers. The results are compared to find the lowest cost-generating solution. Even the best solution from available methods could be deemed sub-optimal as one does not know how close or how far the solution is from optimal. By varying the input variables, supported by a thorough analysis and consideration of future development of the transport network, one can improve efficiency in postal network operations.