Location Selection of Beverage Distribution Center Using a Mathematical Modeling Considering Transportation Logistic Costs

Abstract

This research aims to select the location of the beverage distribution center with the lowest total cost of transportation using a mathematical model by considering the Muang districts of all 76 provinces, excluding Chachoengsao Province, where the factory is located. In the present study, two scenarios were divided: 1) when only one distribution center was required; 2) when four distributions, according to four regions, were required. The results processed by IBM ILOG CPLEX Optimization Studio have shown that Scenario 1, the total transportation cost is 786,107.75 baht/month and the break-even point is 6 years 9 months 1 day. Ayutthaya is the optimal province to set up a distribution center. The solution obtained from the model is consistent with the opinions of the executives of the company, Scenario 2, the total transportation cost is 401,499.61 baht/month and the break-even point is 8 years 2 months 6 days. The results of the establishment of distribution centers classified by regions are as follows. Phra Nakhon Si Ayutthaya Province, Uttaradit Province, Roi Et Province and Phang Nga Province for the central, northern, northeastern, and southern regions respectively.