Supply chain and network design, management & optimization: from facility location to vehicle routing

Supply chain (SC) and logistics management deal with “the design and management of productive systems as well as with the planning and control of daily business operations within a company or in transcorporate networks” [Hieber and Schönslebeh, 2002]. The activity of configuring and organizing a logistic distribution network significantly affect the performance of a complex company, especially when it operates worldwide, in presence of a large number of products and points of demand, and is supported by the availability of several production plants, distribution centers, retailers, up to the final customers. One of the most critical issue and challenge for logistics management is the development of effective tools to support the strategic, tactical and operational decisions of managers. In particular companies that can gather and act upon integrated supporting decisions models, methods and tools can gain great competitive advantages. This chapter presents a conceptual framework for the design, management, control and optimization of a logistic network from the location of facilities to the organization of trips and routes (known as the vehicle routing planning). Effective models and solving methods are also illustrated, from mixed integer linear programming (MILP) to cluster analysis (CA), passing through the development of ad-hoc heuristics algorithms.