The capacitated facility location assignment model with alternative routing consideration

• Main Authors: Africa, Joanna Marie Chua, Chu, Glenysse Gale Salem, Ortiz, Rosaly Lee
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Scheduling (Management); Mathematical models; Production planning; Mathematical optimization; Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/8726
• Institution: De La Salle University

Facilities planning is an area in operations research that has been studied because of its importance to various real world applications. Food industries and gasoline outlets are examples of establishments that require the meticulous selection of a new site to provide an efficient means of transacting business with clients. The optimal location of facilities in a bounded region is usually a question that project managers have difficulty answering. Where is the best site to locate a facility? When is the best time to open a new facility? What facility should serve a particular demand center? What is the optimal number of facilities to open? These questions have been posed by planning groups inside an expanding company. This pure research study is inspired by these questions and the booming industry that the Philippines is undergoing right now. It formulates a facilities location model which can be used as an added tool for management decisions. From the literature and studies reviewed, the proponents was able to generalize that most researches on facilities location rely on two assumptions in formulating their model. First is to use the distance from a site to a demand center and the cost associated with it as an accurate measure of traveling expenses. Second is that any selected site can sufficiently meet the aggregate demand of the area. The said scenarios may not be very realistic. First, for a country that suffers from heavy congestion in the different roads, distance can not be an accurate measure of the cost incurred in traveling. Secondly, the limited site size may violate the assumption that any site chosen can actually supply all the demand facing the company. The objective is to formulate a capacitated facility location assignment model with alternative routing consideration with the goal of minimizing the total expected essential cost composed of the fixed facility cost, the cost incurred for every additional unit to produce, and the transportation cost as a function of the average traveling time. The model is capacitated, such that it does not assume that a facility site can meet aggregate demand hence restricting the model. Capacities can vary depending on the needs of the different customers. Another unique feature of this study is that it includes the selection of the shortest average traveling time between a facility site and the demand centers. The best path is selected on this basis and an assignment of the facility site to the demand center is made. To validate the formulated model, TORA was used to exploit the relationships existing between the decision and system variables. A numerical example is used and an optimal solution is found. Results showed that a facilities location problem is highly sensitive on the fixed facility