Locating Logistic Hubs The Case Study of Worten

Manuel Maria Jorge do Nascimento Valério

Key information

Authors:

Manuel Maria Jorge do Nascimento Valério (Manuel Maria Jorge do Nascimento Valério)

Supervisors:

Pedro Rafael Rodrigues; Susana Isabel Carvalho Relvas (Susana Isabel Carvalho Relvas)

Published in

December 5, 2022

Abstract

Nowadays is vital for a company to differentiate itself from the competition. For Worten, the solution is to offer a service capable of delivering online orders throughout Portugal’s Mainland within a two-hour window. Currently, this is already being in some Worten’s stores, only serving customers which are within a limited covering radius. To reach all of Portugal’s demand, it is necessary to implement several logistic hubs to serve the 278 municipalities spread along Portugal with the purpose of serving online orders. With the information provided by Worten, it was possible to design several scenarios that could meet the company’s requirements. Based on the location and operational cost of each order; the coordinates, demand and cost per square meter of each municipality; and other factors, such as covering radius, hub capacity and percentage of demand covered, it was possible to reach interesting results. From the different scenarios, it was possible to conclude that multiple allocations can be more cost-effective than single. In addition, the 25 km radius is the most realistic model but can easily be the most expensive due to the short covering area. Finally, with 5 logistic hubs, and depending on the covering radius, it is possible to cover between 51% and 88% of online orders. To conclude, several scenarios will be presented in this project, providing several courses of action when implementing logistic hubs.