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 R t , 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 R t 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.