APPLYING MIXED INTEGER PROGRAMMING TO THE DESIGN OF A DISTRIBUTION LOGISTIC NETWORK

Facility location (FL) and production/distribution planning are two of the most significant operational and competitive decisions for modern companies who operate worldwide. The objective of this study was the development and application of a set of mathematical programming models for both the design and management of a multi-stage distribution system to meet the continuous and tremendous pressure on companies to be flexible, competitive, and reduce production and logistic costs. The generic location allocation problem (LAP) belongs to the class ofNP-hard complexity problems. It is based on the placement of one or more facilities (the location problem) in optimum locations and on th.e concurrent assignment of customers to them (the allocation problem) in the best possible way. This requires the maximization of facility utilization, minimization of global costs, maximization of profit and service levels, and finally, it must respect a large set of physical and management constraints operating in the supply chain