Optimisation in a Wholesale Company: A Supply Chain Design Problem

The paper focuses on supply chain design problem, particularly on formulation and verification of a mathematical model. In our research, two interrelated mathematical models represent the supply chain design. The first one defines facility location problem and the second one elaborates vehicle routing problem. Supply chain design is one of the strategic challenges the companies deal with. The first model deals with the decision, where the company's warehouses should be placed. The results serve as an input for the second model based on vehicle routing problem suggesting the best routes from the warehouses to the customers. The necessity of combining the opposing criteria leads to the challenge complexity. The quality of logistic services results in company competitive advantage. It requires higher density of logistic objects and number of routes. However, efficiency of supply chain is qualification if not decisive criterion for customers. It has to be incorporated in it. The paper outlines the solution of the design challenge based on a case study of the wholesale company targeting wide range of its customers in the Czech Republic.