Solving a mathematical model with multi warehouses and retailers in distribution network by a simulated annealing algorithm

Determination of shipment quantity and distribution problem is an important subject in today’s business. This paper describes the inventory/distribution network design. The system addresses a class of distribution network design problem, which is characterized by multiple products family, multiple warehouses and retail-ers. The maximum capacity of vehicles and warehouses are also known. The resulting system focuses on two key goals: minimizing the lost sales cost as a costumer’s satisfaction factor and balancing sum of service dis-tances for different warehouses. In this paper we consider the distribution network problem formulated by 0-1 mixed integer linear programming model. Due to difficulty of obtaining the optimum solution in medium and large scale problems, a simulated annealing algorithm (SA) is also applied. The efficiency of this algorithm is demonstrated by comparing its numerical experiment results with those of SA algorithm and LINGO 6. package.