An Improved Long-Run Model for Multiple Warehouse Location

Abstract

This paper proposes an improved model for solving the long-run multiple warehouse location problem. The approach used provides a synthesis of a mixed integer programming formulation for the single-period warehouse location model with a dynamic programming procedure for finding the optimal sequence of configurations over multiple periods. We show that only the Rt, best rank order solutions in any single period need be considered as candidates for inclusion in the optimal multi-period solution. Thus the computational feasibility of the dynamic programming procedure is enhanced by restricting the state space to these Rt best solutions. Computational results on the ranking procedure are presented, and a problem involving two plants, five warehouses, 15 customer zones, and five periods is solved to illustrate the application of the method.

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