A Heuristic Procedure for Designing a Distribution Network in a Supply Chain System Using Harmony Search Meta-heuristic and Linear Programming

One of the most important problems in supply chain management is the distribution network design problem system which involves locating production plants and distribution warehouses, and determining the best strategy for distributing the product from the plants to the warehouses and from the warehouses to the customers. Our goal is to select the optimum numbers, locations and capacities of plants and warehouses to open so that all customer demand is satisfied at minimum total costs of the distribution network (including transportation and production costs). Unlike most of past research, our study allows for multiple levels of capacities available to the warehouses and plants. We developed a mixed integer programming model for the problem and solved it by a heuristic procedure which contains 2 sub-procedures. We used harmony-search meta-heuristic as the main procedure and linear programming to solve a transshipment problem as a subroutine at any iteration of the main procedure.