Modeling the warehouse location problem for spare parts logistics

Paper in proceeding, 2009

The warehouse location problem aims for finding the optimal point for placing the warehouse in relation to different demand points, with regard to different criteria. In this paper the aim is to apply the main model to the specific area of spare parts logistics by identifying the related considerations for the spare parts sector and including them in the model. Such considerations are not only traced from the perspective of the literature, but also from the practitioners’ viewpoints. However, since there is a lack of literature in this sector, the practice is used as a source to fill these gaps. Furthermore, the model is viewed from the standpoint of two models which have not been used in this area, namely capacitated clustering problem (CCP) and ambulance location problem (ALP). CCP is the problem of total scatter minimization within each of the p clusters made from the classification of n weighted points. This viewpoint, which leads to transportation cost minimization, can be combined with other cost-related criteria to minimize the total costs. On the other hand, ALP is the problem of service level maximization with a given server fleet capacity, by locating the ambulance centers in optimal positions. It can be used to fulfill the service-related requirements of the spare parts sector. The new model, called capacity-based clustered ambulance location problem (CCALP), being built on previous warehouse location models, encompasses the related spare parts logistics considerations and makes use of CCP and ALP models.