A Mathematical Model for Specialized Capacitated Warehouses Location in Supply Chain Network Design

Facility Location Problem with Specialized Warehouses (FLPSW) is a complex challenge in supply chain optimization. Specialized warehouses are designed for specific product categories, introducing additional complexities into the facility placement process. This research proposes an innovative mathematical model for strategically locating facilities while considering specialized warehouses with diverse capacities and operational characteristics. The model incorporates a novel distance metric that accounts for the specialized nature of warehouses and the transportation costs associated with moving products between them. Additionally, the model considers a variety of operational constraints, such as warehouse capacity and product demand. The optimization process is conducted using the CPLEX software, and the model's effectiveness is demonstrated using a hypothetical scenario involving 37 European cities. By comparing scenarios with and without specialized warehouses, the study quantifies the respective overall costs, highlighting the model's potential to substantially reduce costs by strategically locating specialized warehouses. This research provides valuable insights for supply chain decision-makers, helping them to devise facility location strategies that align with their unique operational landscapes.