SYSTEMATIC LITERATURE REVIEW FOR LOCATION-ALLOCATION PROBLEM UNDER ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY

Abstract

Location-allocation problem is one of the vital strategic problems. It determines the locations of facilities that should be opened and the allocation links among them. In this study, systematic literature review is applied to guide the research.  We review three main concepts which are: characteristics of location-allocation problem, economic and environmental sustainability in the scope of supply chain network design, and an optimization model with solution approach. The result suggests that future optimal solution development including mathematical model and solution approach is applied to configure network for specific product type and standard procedure of supply chain flow. Multi-objective functions are used to balance flexibility, reliability, and responsive network structure with standard raw material/product quality consideration in economic and environmental impact perspectives; whereas other impacts, beside pollution, are also taken into account. Moreover, component costs such as inventory holding cost, purchasing cost, production/operation cost and others should be included in the mathematical model. Additionally, new solution for heuristic scenario should be developed and upgraded for a more realistic application for sustainable supply chain network.