Authors: Rajeev Agrawal; Abhinav Goyal
Addresses: Department of Production Engineering, Birla Institute of Technology, Mesra, Ranchi, India ' Department of Production Engineering, Birla Institute of Technology, Mesra, Ranchi, India
Abstract: This paper proposes a simple technique to obtain the optimal location(s) for distribution centre(s), in order to optimise the freight incurred in material transportation. The problem has been formulated as a mathematical model which takes into consideration the distance of the delivery points from the newly established warehouse and the annual demand volumes at each delivery point. The mapping of the delivery location points has been carried out using geographic information system (GIS). The model has been solved using the technique of differential evolution. In order to support the proposed model, a case study of the supply network of a beverage company has been presented, in which an 8.26% of reduction in annual freight incurred has been estimated on implementing the results obtained from the proposed model. The managerial implication of the presented work is in the form of being a decision support tool that helps managers in making the decision for locating a distribution centre facility, for the expansion of their supply chain setup. The aim of this work is to reduce the level of subjectivity involved in the decision-making process, using minimal amount of information available.
Keywords: SCM; supply chain management; differential evolution; freight cost reduction; warehousing location; location optimisation; GIS; geographic information systems; distribution centres; mathematical modelling; beverage industry.
International Journal of Service and Computing Oriented Manufacturing, 2016 Vol.2 No.3/4, pp.245 - 257
Available online: 13 Feb 2017 *Full-text access for editors Access for subscribers Purchase this article Comment on this article