Optimizing the number and location of warehouses in logistics networks considering the optimal delivery routes and set level of reserve stock

Abstract

Forming the optimal structure of a warehouse network is one of the main strategic tasks in arranging an efficient logistics network. The suggested mathematical model and iterative method allow an optimal number and location of warehouses (in the area served by the logistics network) to be defined – with the minimum of total logistics costs for shipping of goods from suppliers through warehouses to customers. The focus is on optimal delivery routes and the optimal level to set for reserve stock contained in the storage network.