The facility location problem in the steel industry: a case study in Latin America

• Published in: Production planning & control Vol. 23; no. 1; pp. 26 - 46
• Main Authors: Conceição, S.V., Pedrosa, L.H.P., Neto, A.S.C., Vinagre, M., Wolff, E.
• Format: Journal Article
• Language: English
• Published: London Taylor & Francis Group 01-01-2012; Taylor & Francis LLC
• Subjects: Acceptability; Case studies; Decision support systems; Integer programming; inventory control; Iron and steel industry; Location analysis; location problem; Multinational corporations; network design; Position (location); Production planning; Programming; Steel industry; Steels; Studies; supply chain optimisation
• ISSN: 0953-7287; 1366-5871
• DOI: 10.1080/09537287.2010.539991

In this article, we present a case study in a complex and diversified multinational steel company using a deterministic formulation for a capacitated location problem based on a model discussed in the literature. The objective is to determine the quantity and location of distribution centres needed to serve a customer base within specified service levels. A large amount of data about the existing distribution network is gathered and modelled. A decision support system based on mixed-integer programming was used to solve the problem. One of the main contributions of this article concerns the manipulation of a large real database to extract enough information to obtain an acceptable model to solve a complex problem of a steel industry based on adaptations and improvements of a model offered in the literature.