Distribution network design under uncertain demand

This paper is focused on the optimised design of a distribution network taking into account the variability of the final customer demand. In particular we study the design of a one-to-many distribution system, considering the product flows from the hub to the different transit points, as well as the reverse flows. The optimization procedure consists of two main steps: the first step is the determination of the total number of the transit points and the second step is the positioning, within the considered regions, of the different transit points with respect to the position of the main hub. The fluctuating demand over the different regions modifies the optimal solution at the different evaluation times. The goal is the definition of the network configuration that minimizes the total costs considering the uncertainty of the customer demand. We have identified two possible strategies to face such uncertainty: a robust and a stable, where the former produces the minimum expected total cost while the latter determines the minimum variability of the different cost components over the different scenarios. The problem has been inspired by a real industrial case in the food distribution sector that has been reported to show the applicability of the proposed model.