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478. Deterministic Model for Optimal Industrial Parks Location: The Case of Indonesia's Nickel Industry

Invited abstract in session WA-61: Applications of Location Methods, stream Locational Analysis.

Wednesday, 8:30-10:00
Room: S10 (building: 101)

Authors (first author is the speaker)

1. Hasan Nur
Information System and Operation Management, University of Auckland
2. Aadhaar Chaturvedi
Information Systems and Operations Management, University of Auckland
3. Valery Pavlov
Information Systems and Operations Management, University of Auckland

Abstract

Industrial parks play a crucial role in facilitating the rapid industrialization of many emerging economies countries. However, planning these parks is complex, and their success hinges on strategic location decisions. This study proposes a mixed-integer linear programming formulation to determine the optimal locations of industrial parks to minimize total costs. It integrates large-scale actual distance measurements and multi-mode transportation considerations, capturing geographical nuances more realistically. Recognizing the energy-intensive nature of industries, the model incorporates transportation costs associated with energy sources. Real-world data sourced from the Indonesian nickel industry lends practical relevance to the proposed model within limited facility location studies with real-world applications. The case study examines 81 potential park locations, 139 nickel mining, and 20 coal mining sites, resulting in over 13,000 variables. Leveraging OpenSolver, optimal solutions are obtained within 15 seconds. The analysis unveils two optimal industrial park locations alongside capacity, raw materials, and energy supply allocation to selected industrial parks. Insights from sensitivity analysis include the pronounced influence of land acquisition, sea transport costs, and the elevated total costs associated with single-location industrial parks. Future research will explore uncertainty parameters relevant to the context of emerging economies.

Keywords

Status: accepted

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