Facility Location Problem
The Facility Location Problem involves determining the most efficient locations for facilities, such as warehouses or factories, to minimize costs while meeting customer demand. This problem is crucial in logistics and supply chain management, as it directly impacts transportation costs, service levels, and overall operational efficiency.
Various methods, including mathematical modeling and optimization techniques, are used to solve the Facility Location Problem. Factors considered include facility costs, transportation costs, and customer locations. By strategically placing facilities, businesses can enhance their service delivery and reduce expenses, ultimately improving their competitive advantage in the market.