Simulation-based approach to the Warehouse Location Problem for a large-scale real instance

Abstract

We simulated a large-scale Uncapacitated Warehouse (Facility) Location Problems (UFLP) in the real world on a digital map, and found an approximate solution. The problem was to find a near-optimal solution for the number and locations of warehouses that minimize the sum of the transportation cost and fixed cost, and meet the needs of 6,800 customers. The network data of the digital map were efficiently used to obtain candidate warehouse locations, to simulate the transportation cost, to simulate the warehouse fixed cost, and to find a near-optimal solution for the number and locations of warehouses. In this paper, we propose a simulation-based approach to the large-scale UFLP, including a new heuristic algorithm named `Balloon Search,' and give the results of our experiments.