A non-linear program to find an approximate location of a second warehouse: A case study

Abstract

     A mathematical model was developed to estimate the location of a second warehouse for a case study in Bangkok. A non-linear program was developed based on the Load Distance Technique. The objective function was to minimize the sum of weighted straight-line distances from the first or second warehouse to either vendors or customers. The straight-line distance was determined using the principle of Pythagorean triples and was weighted by the shipment frequency and the shipment cost rate. The model was then solved using the Microsoft Excel Solver upgraded to the Premium Solver Platform. The starting solutions were randomly set within a specified range to obtain different local optimal solutions. The best one was finally selected to be the approximate location of the second warehouse. Sensitivity to customer demands was conducted and some useful recommendations are provided.