Effect of Inventory Holding and Setup Costs on Facility Location Problems

摘要

The aim of this paper is to introduce a strategic-operational Mixed Integer Linear Programming (MILP) model that analyzes the effect of the budgeted inventory holding cost and setup cost on the supply chain-facility location decisions. The objective function minimizes the total transportation cost among different distribution channels, the inventory holding cost, the setup cost at the warehouse, and the fixed cost of opening and operating each facility. The model was tested on problems of different sizes (small, medium, and large). Computational results and analysis for the different problems are presented.