Cover Image

Location-Allocation Problems in The Perspective of Supply Chain: Approaches and Applications

Ilyas Masudin


This article attempts to explore approaches and applications of the location-allocation problems in the supply chain perspective. A review has been done for articles which have relation with the approach of location-allocation problems that includes the drivers of the supply chain such as inventory, transportation, service level, and customer demand. Moreover, the application of location-allocation problems that consider supply chain drivers is also discussed. In this article, a discussion of location-allocation discussions previously investigated by researchers is done through a literature review published in several reputable journal databases. 57 journal articles successfully collected and reviewed related approaches and applications used by researchers in location-allocation problems in a supply chain perspective. Analysis of the findings of this article can be summarized that approaches of the location-allocation problem in supply chain perspective can be divided into 2 areas: the echelon of the supply chain and the drivers of the supply chain. 


supply chain; location problem; allocation; approach

Full Text:



T. Santoso, S. Ahmed, M. Goetschalckx, and A. Shapiro, "A stochastic programming approach for supply chain network design under uncertainty," European Journal of Operational Research, vol. 167, pp. 96-115, 2005. [2] S. H. Owen and M. S. Daskin, "Strategic facility location: A review," European journal of operational research, vol. 111, pp. 423-447, 1998. [3] R. Bhatnagar and A. S. Sohal, "Supply chain competitiveness: measuring the impact of location factors, uncertainty and manufacturing practices," Technovation, vol. 25, pp. 443-456, 2005. [4] J. Perl and S. Sirisoponsilp, "Distribution networks: facility location, transportation and inventory," International Journal of Physical Distribution & Materials Management, vol. 18, pp. 18-26, 1988. [5] M. T. Melo, S. Nickel, and F. Saldanha-Da-Gama, "Facility location and supply chain management–A review," European journal of operational research, vol. 196, pp. 401-412, 2009. [6] G. Şahin and H. Süral, "A review of hierarchical facility location models," Computers & Operations Research, vol. 34, pp. 2310-2331, 2007. [7] Z.-J. M. Shen, C. Coullard, and M. S. Daskin, "A joint location-inventory model," Transportation science, vol. 37, pp. 40-55, 2003. [8] H. E. Romeijn, J. Shu, and C.-P. Teo, "Designing two-echelon supply networks," European Journal of Operational Research, vol. 178, pp. 449-462, 2007. [9] A. Diabat, O. Battaïa, and D. Nazzal, "An improved Lagrangian relaxation-based heuristic for a joint location-inventory problem," Computers & Operations Research, vol. 61, pp. 170-178, 2015. [10] M. Hosseini and M. Ameli, "A bi-objective model for emergency services location-allocation problem with maximum distance constraint," Management Science Letters, vol. 1, pp. 115-126, 2011. [11] A. Diabat, T. Abdallah, and A. Henschel, "A closed-loop location-inventory problem with spare parts consideration," Computers & Operations Research, vol. 54, pp. 245-256, 2015. [12] B. Avittathur, J. Shah, and O. K. Gupta, "Distribution centre location modelling for differential sales tax structure," European Journal of Operational Research, vol. 162, pp. 191-205, 2005. [13] I. Masudin, "Facility location modeling in multi-echelon distribution system: A case study of Indonesian Liquefied petroleum gas supply chain," Aceh International Journal of Science and Technology, vol. 2, pp. 37-43, 2013. [14] R. Church and C. ReVelle, "The maximal covering location problem," in Papers of the Regional Science Association, 1974, pp. 101-118. [15] Y. Hinojosa, J. Kalcsics, S. Nickel, J. Puerto, and S. Velten, "Dynamic supply chain design with inventory," Computers & Operations Research, vol. 35, pp. 373-391, 2008. [16] H. Ma and R. Davidrajuh, "An iterative approach for distribution chain design in agile virtual environment," Industrial Management & Data Systems, vol. 105, pp. 815-834, 2005. [17] Z.-J. M. Shen, "A profit-maximizing supply chain network design model with demand choice flexibility," Operations Research Letters, vol. 34, pp. 673-682, 2006. [18] K. Sourirajan, L. Ozsen, and R. Uzsoy, "A single-product network design model with lead time and safety stock considerations," IIE Transactions, vol. 39, pp. 411-424, 2007. [19] A. Marin and B. Pelegrín, "The return plant location problem: Modelling and resolution," European journal of operational research, vol. 104, pp. 375-392, 1998. [20] D. R. Sule, "Simple methods for uncapacitated facility location/allocation problems," Journal of Operations Management, vol. 1, pp. 215-223, 1981. [21] P. Hanjoul and D. Peeters, "A facility location problem with clients' preference orderings," Regional Science and Urban Economics, vol. 17, pp. 451-473, 1987. [22] L. K. Nozick and M. A. Turnquist, "Integrating inventory impacts into a fixed-charge model for locating distribution centers," Transportation Research Part E: Logistics and Transportation Review, vol. 34, pp. 173-186, 1998. [23] A. Suzuki and Z. Drezner, "The p-center location problem in an area," Location science, vol. 4, pp. 69-82, 1996. [24] L. K. Nozick and M. A. Turnquist, "Inventory, transportation, service quality and the location of distribution centers," European Journal of Operational Research, vol. 129, pp. 362-371, 2001. [25] A. T. Murray and R. A. Gerrard, "Capacitated service and regional constraints in location-allocation modeling," Location science, vol. 5, pp. 103-118, 1997. [26] M. S. Daskin, "What you should know about location modeling," Naval Research Logistics (NRL), vol. 55, pp. 283-294, 2008. [27] J. Bautista and J. Pereira, "Modeling the problem of locating collection areas for urban waste management. An application to the metropolitan area of Barcelona," Omega, vol. 34, pp. 617-629, 2006. [28] S.-u. Rahman and D. K. Smith, "Use of location-allocation models in health service development planning in developing nations," ed: Elsevier, 2000. [29] H. Jia, F. Ordóñez, and M. M. Dessouky, "Solution approaches for facility location of medical supplies for large-scale emergencies," Computers & Industrial Engineering, vol. 52, pp. 257-276, 2007. [30] A. R. Mahmud and V. Indriasari, "Facility location models development to maximize total service area," Theoretical and Empirical Researches in Urban Management, vol. 4, pp. 87-100, 2009. [31] F. Barahona and D. Jensen, "Plant location with minimum inventory," Mathematical Programming, vol. 83, pp. 101-111, 1998. [32] A. I. Barros, R. Dekker, and V. Scholten, "A two-level network for recycling sand: a case study," European journal of operational research, vol. 110, pp. 199-214, 1998. [33] I. Masudin, "An Investigation of The Relationship Between Facility Location Decisions, Service Level and Distribution Costs: A Proposed Model Ffr Indonesian LPG Supply Chain," International Journal of Business & Society, vol. 16, 2015. [34] S. U. Randhawa and T. M. West, "An integrated approach to facility location problems," Computers & Industrial Engineering, vol. 29, pp. 261-265, 1995. [35] Z.-J. M. Shen and L. Qi, "Incorporating inventory and routing costs in strategic location models," European journal of operational research, vol. 179, pp. 372-389, 2007. [36] A. A. Javid and N. Azad, "Incorporating location, routing and inventory decisions in supply chain network design," Transportation Research Part E: Logistics and Transportation Review, vol. 46, pp. 582-597, 2010. [37] S. Sirisoponsilp, "Warehouse location under multiple transportation options," 1991. [38] S. Melkote and M. S. Daskin, "An integrated model of facility location and transportation network design," Transportation Research Part A: Policy and Practice, vol. 35, pp. 515-538, 2001. [39] G. T. Temur, T. Kaya, and C. Kahraman, "Facility location selection in reverse logistics using a type-2 fuzzy decision aid method," in Supply chain management under fuzziness, ed: Springer, 2014, pp. 591-606. [40] R. Z. Farahani, M. Hekmatfar, B. Fahimnia, and N. Kazemzadeh, "Hierarchical facility location problem: Models, classifications, techniques, and applications," Computers & Industrial Engineering, vol. 68, pp. 104-117, 2014. [41] P. Chaiwuttisak, H. Smith, Y. Wu, C. Potts, T. Sakuldamrongpanich, and S. Pathomsiri, "Location of low-cost blood collection and distribution centres in Thailand," Operations Research for Health Care, vol. 9, pp. 7-15, 2016. [42] M. Gebicki, E. Mooney, S.-J. G. Chen, and L. M. Mazur, "Evaluation of hospital medication inventory policies," Health care management science, vol. 17, pp. 215-229, 2014. [43] G. Şahin, H. Süral, and S. Meral, "Locational analysis for regionalization of Turkish Red Crescent blood services," Computers & Operations Research, vol. 34, pp. 692-704, 2007. [44] J. Schuijbroek, R. C. Hampshire, and W.-J. Van Hoeve, "Inventory rebalancing and vehicle routing in bike sharing systems," European Journal of Operational Research, vol. 257, pp. 992-1004, 2017. [45] B. Boyacı, K. G. Zografos, and N. Geroliminis, "An optimization framework for the development of efficient one-way car-sharing systems," European Journal of Operational Research, vol. 240, pp. 718-733, 2015. [46] J.-R. Lin and T.-H. Yang, "Strategic design of public bicycle sharing systems with service level constraints," Transportation research part E: logistics and transportation review, vol. 47, pp. 284-294, 2011. [47] Y. V. Usman, A. H. Ismail, N. Y. Hidayah, and L. Chairani, "Pengembangan model pemilihan lokasi pembuangan akhir sampah perkotaan (Studi kasus: Kota Jakarta Timur)," 2013. [48] N. Acharya, P. Mahat, and N. Mithulananthan, "An analytical approach for DG allocation in primary distribution network," International Journal of Electrical Power & Energy Systems, vol. 28, pp. 669-678, 2006. [49] K. Govindan, A. Jafarian, R. Khodaverdi, and K. Devika, "Two-echelon multiple-vehicle location–routing problem with time windows for optimization of sustainable supply chain network of perishable food," International Journal of Production Economics, vol. 152, pp. 9-28, 2014. [50] P. E. D. K. Wati and H. Nuha, "Pengembangan Model Capacitated Maximal Covering Location Problem (CMCLP) Dalam Penentuan Lokasi Pendirian Gudang," Jurnal Teknik Industri, vol. 19, pp. 21-27, 2018. [51] D. Kusmindarti, "Penentuan Lokasi Distributor dengan Menggunakan Analytical Hierarchy Process dan Skala Liberatore," Jurnal Teknik Industri, vol. 10, pp. 13-19, 2010. [52] Z. Lu and N. Bostel, "A facility location model for logistics systems including reverse flows: The case of remanufacturing activities," Computers & Operations Research, vol. 34, pp. 299-323, 2007. [53] G. Cornuéjols, G. Nemhauser, and L. Wolsey, "The Uncapicitated Facility Location Problem," Cornell University Operations Research and Industrial Engineering1983. [54] S. M. Mousavi, N. Alikar, S. T. A. Niaki, and A. Bahreininejad, "Optimizing a location allocation-inventory problem in a two-echelon supply chain network: A modified fruit fly optimization algorithm," Computers & Industrial Engineering, vol. 87, pp. 543-560, 2015. [55] B. L. Shankar, S. Basavarajappa, J. C. Chen, and R. S. Kadadevaramath, "Location and allocation decisions for multi-echelon supply chain network–A multi-objective evolutionary approach," Expert Systems with Applications, vol. 40, pp. 551-562, 2013. [56] S. M. Mousavi, A. Bahreininejad, S. N. Musa, and F. Yusof, "A modified particle swarm optimization for solving the integrated location and inventory control problems in a two-echelon supply chain network," Journal of intelligent manufacturing, vol. 28, pp. 191-206, 2017. [57] V. Hajipour, S. H. A. Rahmati, S. H. R. Pasandideh, and S. T. A. Niaki, "A multi-objective harmony search algorithm to optimize multi-server location–allocation problem in congested systems," Computers & Industrial Engineering, vol. 72, pp. 187-197, 2014.

DOI: | Abstract views : 575 | PDF views : 575 |

Copyright (c) 2019 Jurnal Teknik Industri

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.