A multi-objective two echelon capacitated facility location problem

Abstract

This paper addresses the multi-objective two echelon capacitated facility location problem under covering distance restrictions. It aims to minimize total cost and to maximize demand coverage for a hierarchical facility network while considering covering distance. The problem is formulated as a mixed integer nonlinear (MINL) model. The objective presents total cost minimization including setup cost for facilities in all hierarchical levels, transportation cost along the network providing n service types, and penalty cost for uncovered demand. The model is verified and validated by a real life case study for redesigning a coherent distribution network for electrical household equipment. The problem was solved via Lingo 14. Results obtained by the proposed model were compared with the actual state. The comparison proves that the proposed model provides better results in terms of cost and coverage.