Facility Location Theory.
Report 2003.TL.6805, Transport Engineering and Logistics.
Logistics, as defined by the Council of Logistics Management, is
"that part of the supply chain process that plans, implements and
controls the efficient, effective flow and storage of goods, services, and
related information from the point of origin to the point of consumption
in order to meet customers' requirements." [D.R. Sule Logistics of Facility
Location and Allocation Marcel Dekker, New York, 2001]
Important aspects of logistics are vendor selection, order processing,
order follow-up, order quantity, ordering frequency, inventory control,
storage, intra-facility material handling, selection of facility
(warehouse, plant, etc.) locations, and layout within facilities and
Improving facility location and layout are very important in saving the total
cost of the logistics process and better serving customers. Location of
facilities also determines the distribution pattern and associated properties
of the distribution pattern, such as time, and cost, in the logistics supply
chain system. Placement of facilities at optimum locations and allocating
customers to them in the best way will improve the flow of material and
services offered by facilities to the customer, but also utilizes the
facilities in an optimum manner, so reducing redundant facilities.
This report delineates the classification of facility location problem and
introduces some of the basic of qualitative methods and quantitative models
to solve the facility location problem. In the end of this report, an
application of facility location problem is given and also special software
for facility location problem is introduced.
Reports on Transport Engineering and Logistics (in Dutch)
, TU Delft