Solving a mathematical model with multi warehouses and retailers in distribution network by a simulated annealing algorithm

Determination of shipment quantity and distribution problem is an important subject in today’s business.This paper describes the inventory/distribution network design. The system addresses a class of distributionnetwork design problem, which is characterized by multiple products family, multiple warehouses and retailers.The maximum capacity of vehicles and warehouses are also known. The resulting system focuses on twokey goals: minimizing the lost sales cost as a costumer’s satisfaction factor and balancing sum of service distancesfor different warehouses. In this paper we consider the distribution network problem formulated by 0-1mixed integer linear programming model. Due to difficulty of obtaining the optimum solution in medium andlarge scale problems, a simulated annealing algorithm (SA) is also applied. The efficiency of this algorithm isdemonstrated by comparing its numerical experiment results with those of SA algorithm and LINGO 6. package.