Determining the optimal place and capacity of spare parts warehouses in the construction industry (Q1082238)

In the construction industry, places, capacities and levels of demand in basic spare parts are changing in relatively short periods of time. This creates an optimization problem of the following form. We are given the following: (i) The location and the level of demand for each basic spare part in each work site for a specific time period. (ii) The places and the levels of demand can be altered. (iii) There are more than one supplier of each part geografically distributed. (iv) The number of basic equipment spare parts. (v) The transportation cost per load of spare parts. (vi) The purchasing and functioning cost of the various air houses used as warehouses of spare parts. We present an algorithm which determines the place, capacity and number of supply points to minimize the total cost of the supply system under the constraints (i) to (vi) above.