A Decomposition Strategy for Optimal Design of a Soda Company Distribution System

Abstract

This work presents a distribution problem of products of a soda bottling company. Commodities are produced at several plants with limited capacity and the demand of distribution centers is satisfied by shipping via cross-docking warehouses. The decomposition strategy is proposed to determine which warehouse needs to be opened to consolidate the demand and by which warehouse each distribution center is served exclusively. The objective is minimizing fixed costs and total transportation costs. The model presented is a mixed-integer programming model with binary variables for which we propose a decomposition strategy based on Benders algorithm. Numerical results show that the proposed strategy can provide the optimal solution of several instances. A large-scale case study based on a realistic company situation is analyzed. Solutions obtained by the proposed method are compared with the solution of full scale problem in order to determine the quality bound and computational time.