Multiple criteria optimization of contemporary logistics distribution network problems

William Ho, Carman K.M. Lee, George To Sum Ho

Research output: Contribution to journalArticlepeer-review

Abstract

In the contemporary customer-driven supply chain, maximization of customer service plays an equally important role as minimization of costs for a company to retain and increase its competitiveness. This article develops a multiple-criteria optimization approach, combining the analytic hierarchy process (AHP) and an integer linear programming (ILP) model, to aid the design of an optimal logistics distribution network. The proposed approach outperforms traditional
cost-based optimization techniques because it considers both quantitative and qualitative factors and also aims at maximizing the benefits of deliverer and customers. In the approach, the AHP is used to determine the relative importance weightings or priorities of alternative warehouses with respect to some critical customer-oriented criteria. The results of AHP prioritization are utilized as the input of the ILP model, the objective of which is to select the best warehouses at the lowest possible cost. In this article, two commercial packages are used: including Expert Choice and LINDO.
Original languageEnglish
Pages (from-to)27-43
Number of pages17
JournalOR Insight
Volume23
DOIs
Publication statusPublished - 2010

Keywords

  • logistics
  • distribution network
  • analytic hierarchy process
  • mathematical model
  • multiple criteria optimization

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