Optimizing the Size and Location of Logistics Terminals

Abstract A mathematical model for optimizing the size and location of logistics terminals was developed by using queuing theory and non-linear programming. The model explicitly takes into account the road network and one can determine the size and location of logistics terminals considering traffic conditions in road network. The model was successfully applied to an imaginary road network. It was found that the change of amount of goods generation and attraction greatly affects the selection of optimal terminal locations. The concentration of freight demand in CBD requires closer location of logistics terminals to CBD even if the facility cost at terminals is high with high land price.