Piecewise Linearization for Solving Models to Locate Urban Logistics Facilities

Facilities location is a strategic decision in supply chain design since it affects products and information flows through all the echelons. In urban contexts, facilities location is even more important because it shapes both the distribution activities and urban landscapes. In addition, changes in facilities location patterns have caused non-intended externalities such as congestion, emissions, noise, among others. We present a non-linear programming model to establish optimal facilities location in urban areas, modelling the city as a transportation network and considering congestion into the objective function. To solve the model, we use a piecewise linear optimization, which allows to obtain an optimal solution.