A large scale location-allocation problem in the natural rubber industry

Abstract

In trying to improve the efficiency of the smallholder sector of the natural rubber industry, the Malaysian government is faced with large-scale location-allocation problems. This involves locating and operating central rubber processing factories producing high quality natural rubber, siting of collection stations to which the smallholders can bring their latex, and the vehicle routing problem of transporting the latex to the central rubber processing factories. We formulate a global model which minimizes the collection and fixed costs of the system, subject to capacity and time constraints. Since real-life problems, from their sheer magnitude, are impossible to solve optimally, heuristic approaches are suggested for a simplified version of the problem.