Integrating Competitive and Uncompetitive Facilities Location Decisions in a Strategic Multi-echelon Distribution Network Design Mode

Decisions about the distribution system are strategic issues for almost every company. The problem of locating facilities and allocating customers covers the core component of distribution system design. The model stated on this paper is an extension of the classical capacitated develop an heuristic approach to solve a great instance. The main contribution of this paper is the formulation of a multi-echelon distribution network design problem which made up of competitive and non-competitive facilities, and the incorporation of tactical and operational decisions into the facility location problem solution scheme. In a number application we found that the potential cost reduction, compared to the traditional approach, increases when the holding and service level are higher, especially when the severe competitive exists in the market. Through comparing to the result of the sequential distribution network design, the integrated approach can reduce to better results due to the tradeoff between the two level facilities location