A warehouse selection problem based on random delivery times

Abstract

This paper presents an approach to selecting the best warehouse, from a number of warehouses that is expected to have the highest possibility to deliver the goods to a retailer under consideration within a specified time. The decision is made at the design phase of the supply chain on the basis of the data on delivery times collected from the warehouses using affordable resources. For determining the necessary sample sizes, available resource is allocated over the warehouses. Here the delivery times are assumed to be random. A method of finding the optimal solution has been developed and applied to different delivery time distributions. A nonparametric method has been adopted in case the delivery time distributions are unknown. Numerical examples are provided for illustrating the method. Simulations have been carried out to show the worthiness of the proposed method. A sensitivity analysis has been done to examine how the optimal allocation changes with the change in the parameter values of the underlying distributions.