Particle Swam Optimization for Multi-level Location Allocation Problem Under Supplier Evaluation

The aim of this paper is to propose the method for solving multi-level location allocation problems under supplier evaluation. The proposed problem is solved by particle swarm optimization (PSO). Generally, the multi-level location allocation problem considers the suitable locations to service customers or to store inventory from the suppliers. The proposed problem is to determine the suitable location to store and produce the product from the selected suppliers and then delivers product to the customers. The selected suppliers are determined by the capability of them. The capability of the suppliers means the quality of the material delivered and the reliability of delivery date which gather from their past statistics. The problem solving can be divided into two steps: the first step is to evaluate each potential supplier using fuzzy approach and second step is to selects the locations in order to serve the customer demand with minimum cost using PSO by calculating the amount of material shipped to location by a specified supplier closeness coefficient (CC_h). As the results, the percentage error is between 0.89 and 16.90 % and the average runtime is 4.2 s.