A Network Model for the Location-Routing Decisions of a Logistics Company

Abstract

In this paper, part of the logistics network of one of the leading logistics companies in Turkey is analyzed. Data related to the candidate warehouse locations, supplies and demands of customers are collected. A network model is developed in order to reconfigure the logistics network. The aim of the mathematical model is to help decision makers decide on the locations of warehouses, as well as routing products from suppliers to the distribution center; from distribution center to warehouses; and finally from warehouses to customers. The mathematical model is solved optimally with LINGO solver, and the comparison of the current network with the optimal solution revealed that the overall operating costs can be reduced by approximately 7%.