A Multi-Level Programming Model and Solution Algorithm for the Location of Distribution Centers with Uncertainty Demand
The tri-level programming model is presented to seek the optimal location for distribution centers. The objective of top level model is to determine the optimal location by minimizing the total logistic cost which consists of the fixed operating cost to open distribution centers, the penalty cost and the transportation cost. The middle level model gives an equilibrium demand distribution center by maximizing the total customer demand (in %) that can be delivered on time and to maximize customer satisfaction in the bottom level model. The proposed algorithm is applied to solve this model to obtain the optimal solution. Finally, the tri-level programming model and its algorithm are demonstrated by a numerical example.
KeywordsMulti-level programming Optimization model Location problem Distribution network
This research is supported by the Center of Excellence in Mathematics (CEM), Faculty of Science at Mahidol University, Phayathai Campus, Ratchathewi, Bangkok 10400.
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