A Decision Support System for a Location-Allocation-Routing Problem

In this paper we describe a decision support system that was developed for supporting strategical and tactical decisionmaking with respect to the determination of the distribution structure of companies. It deals with problems where the locations of warehouses have to be determined such that fixed and operational distribution- and routing costs are minimized subject to amongst others capacity-, vehicle fleet-, client and service degree constraints. The system, still under development, is used by consultants to perform distribution studies. The DSS contains a heuristic to find the “optimal” locations of Wp warehouses out of a possible set of warehouses W. At the beginning of each iteration we have Wp warehouses and the assignment of clients to one of these warehouses. We then solve the corresponding Wp single warehouse vehicle routing problems. The routes found are used to cluster the clients into groups. Next we solve a p-median problem defined on the clusters, which constitutes the starting point for the next iteration of the heuristic.