Comparative study on determining warehouse locations using set-covering and P-median.

The location problem is defined as a problem on determining where the facility should be located. Determining the facility location considers several factors: distance, customers, and costs. A State-Owned Enterprise (BUMN) that provides public service obligations to procure and distribute rice to beneficiaries (Raskin) is studied as a case study. The case study has 1500 warehouses to support community service activities. In this study, the Set Covering Problem (SCP) and P-Median methods were used to find the optimal number of warehouses to support the distribution of Raskin in Central Java and Yogyakarta (DIY) Province. Regarding the number of selected warehouses, the SCP model gives better results than the P-median. The total number of chosen warehouses is 13 from the SCP compared to 16 warehouses from the P-median. However, in terms of total mileage, the P-median gives a better result than the SCP method in each Divre and Sub-divre, with the total distance by the P-median being 941 Km compared to 1301 Km mileage for the SCP model. The P-median method also gives better results in terms of total distribution costs. [ABSTRACT FROM AUTHOR]