A distribution network design problem in the automotive industry: MIP formulation and heuristics

We consider a multi-product distribution network design problem arising from a case-study in the automotive industry. Based on the realistic assumptions, we introduce minimum volume, maximum covering distance and single sourcing constraints, making the problem difficult to solve for large-size instances. We thus develop several heuristic procedures using various relaxations of the original MIP formulation of the problem. In our numerical experiments, we analyze the structure of the obtained network as well as the impact of varying the problem parameters on computation times. We also show that the implemented heuristic methods provide good quality solutions within short computation times on instances for which a state-of-the-art MIP solver does not produce any feasible solution.