An Efficient Heuristic Procedure for Practical-Sized Capacitated Warehouse Design and Management*

The purpose of this paper is to refine and test a distribution system design model and evaluate its performance with respect to solution quality, model validation, and algorithm performance. The paper reports on the development of a multiproduct warehouse logistics model. The logistics model is used to predict the performance of distribution companies that typically have to deal with product costs, the cost to distribute the products from a set of warehouses to customer outlets, the level of service provided to its customers, and flexibility for each product group and market segment.