Mathematical simulation for automotive supplier warehouse redesign problem.

Automotive suppliers are consisted with different tiers and rely much to the 'just in time' deliveries to the assembly plant in order to fulfill their customer order efficiently. It can be beneficial for the automotive industries to find the most efficient warehouse location with respect to the assembly plant. Therefore, this study aims to construct an automotive supplier warehouse network model that minimizes the total supply chain costs by consolidating, eliminating, and adding new sites. The study is carried out on three types of network data types: data type 1 – uniform, data type 2 – cluster, and data type 3 – compact. Data 1 shows that numerous facilities were not needed to meet the demands of a small number of customers. In addition, existing warehouse network redesign models and mathematical programming models do not consider the consolidation, elimination, and addition of a new warehouse simultaneously in one model but only consider one or a combination of two of them only. However, these three redesign techniques namely addition, closure, and consolidation of a new warehouse should be considered in the model to optimize the cost. The results pointed to recommend opening nine new warehouses. Data 2 and Data 3 suggested more customers, so more warehouses were proposed to operate, where the number of new warehouses never selected by the model was small. The analysis in this study shows that all three types of data have differences in redesigning the warehouse network. Most important is the improvement made in this study compared to the previous study is that new warehouse placements are not randomly placed but using the allocation location model. Since the proposed new warehouse is in a strategic location, taking into account the position of the automotive assembly plant and the vendor's warehouses then a more optimal cost can be obtained as a result of this study. [ABSTRACT FROM AUTHOR]