Network Flexibility for Recourse Considerations in Bi-Criteria Facility Location

Abstract

What is the best set of facility location decisions for the establishment of a logistics network when it is uncertain how a company’s distribution strategy will evolve? What is the best configuration of a distribution network that will most likely have to be altered in the future? Today’s business environment is turbulent, and operating conditions for firms can take a turn for the worse at any moment. This fact can and often does influence companies to occasionally expand or contract their distribution networks. For most companies operating in this chaotic business environment, there is a continuous struggle between staying cost efficient and supplying adequate service. Establishing a distribution network which is flexible or easily adaptable is the key to survival under these conditions. This research begins to address the problem of locating facilities in a logistics network in the face of an evolving strategic focus through the implicit consideration of the uncertainty of parameters. The trade-off of cost and customer service is thoroughly examined in a series of multi-criteria location problems. Modeling techniques for incorporating service restrictions for facility location in strategic network design are investigated. A flexibility metric is derived for the purposes of quantifying the similarity of a set of non-dominated solutions in strategic network design. Finally, a multi-objective greedy random adaptive search (MOG) metaheuristic is applied to solve a series of bi-criteria, multi-level facility location problems

    Similar works