Simulated Annealing to solve single stage capacitated warehouse location problem

Facility Location Problem (FLP) is a critical aspect in supply chain that is difficult to be solved in order to design an efficient supply chain. The terms of location problem refers to modeling, formulating, and solving problem, which is determining the location of facilities in certain area. Warehouse Location Problem is one model of Facility Location Problem which aims to locate the set of warehouses as one of distribution facility. In this study, a mathematical model of Single Stage Capacitated Warehouse Location Problem (SSCWLP) has been developed to determine the optimal warehouse location in fertilizer distribution of PT. Petrokimia Gresik in Sumatera Island, Indonesia. Basically, SSCWLP is an NP-Hard problem that requires long computing time to be solved by using exact methods. The weakness is resolved by using metaheuristics algorithm, namely Simulated Annealing (SA). The next step is testing the performance of SA by comparing the results of SA with those of branch & bound (BB). The algorithm provides results which are better to the existing solutions and have small gaps with those of exact method. (C) 2015 The Authors. Published Elsevier B.V.