Economic sizing of warehouses when there are restrictions on hiring of warehouse space: an integer programming approach

Abstract

Determining the optimal size for a private warehouse is a planning problem which can affect the overall operations of a firm. Some Authors presented a linear programming formulation which determines the optimal size warehouse to construct when demand is highly seasonal and public warehouse space is available for lease on a monthly basis. In this paper, the situation where the public warehouse space* should be leased only for a long period of time is considered. Integer programming formulations are presented for single lease and multiple lease situations. Computational experiences will be presented later.