An algorithm for a two-stage distribution system with various types of distribution centers

This paper describes an integer programming formulation for the design of distribution networks in which intermediate depots, such as distribution centers or warehouses, must belong to one of a set of pre-defined (standardized) facility types. Many organizations that operate a variety of distribution centers (or warehouses) have established standardized facilities so as to save fixed set-up costs when new facilities are built. A category of variable ‘distribution centre type’ offers one the opportunity to model this distinction. The standard warehouse location problem is extended to a generalization of multitype capacitated distribution center location problem. A cross-decomposition algorithm is proposed to solve this problem.