Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep

Abstract

It is a known fact that basic health care services cannot reach the majority of the population due to poor geographical accessibility. Unless quantitative location-allocation models and geographic information systems (GIS) are used, the final decision may be made on pragmatic considerations which can result far from optimal. In this paper, current and possible (or potential) new locations of pharmacy warehouses in Gaziantep are investigated to provide optimal distribution of hospitals and pharmacies. To do so, first of all, geographic information of 10 current and 10 potential pharmacy warehouses, 231 pharmacies and 29 hospitals are gathered using GIS. Second, a set covering mathematical model is handled to determine coverage capability of current and potential pharmacy warehouses and minimize the number of warehouses to be opened. Finally, P-center and P-median mathematical models are applied to open potential warehouses and to assign pharmacies & hospitals to the opened warehouses so that the total distance and the demand’s longest distance to the source are minimized. Developed integer programming (IP) models and GIS software are compared with on a case study. Computational experiments prove that our approach can find new potential pharmacy warehouses which cover wider areas than current warehouses to service pharmacies and hospitals in the city.

Full text

*Corresponding author
117
An International Journal of Optimization and Control: Theories & Applications
ISSN: 2146-0957 eISSN: 2146-5703
Vol.7, No.1, pp.117-129 (2017)
https://doi.org/10.11121/ijocta.01.2017.00373
RESEARCH ARTICLE
Optimizing the location-allocation problem of pharmacy warehouses:
A case study in Gaziantep
Eren Özceylana *, Ayşenur Uslub, Mehmet Erbaşc, Cihan Çetinkayaa, Selçuk Kürşat İşleyend
a Department of Industrial Engineering, Gaziantep University, Turkey
b Department of Industrial Engineering, Başkent University, Turkey
c General Command of Mapping, Ministry of National Defense, Ankara, Turkey
d Department of Industrial Engineering, Gazi University, Turkey
erenozceylan@gmail.com, aysenur@baskent.edu.tr, merbas55@gmail.com, cihancetinkaya@gantep.edu.tr,
isleyens@gazi.edu.tr
ARTICLE INFO
ABSTRACT
Article history:
Received: 26 July 2016
Accepted: 10 January 2017
Available Online: 20 January 2017
It is a known fact that basic health care services cannot reach the majority of the
population due to poor geographical accessibility. Unless quantitative location-
allocation models and geographic information systems (GIS) are used, the final
decision may be made on pragmatic considerations which can result far from
optimal. In this paper, current and possible (or potential) new locations of
pharmacy warehouses in Gaziantep are investigated to provide optimal
distribution of hospitals and pharmacies. To do so, first of all, geographic
information of 10 current and 10 potential pharmacy warehouses, 231
pharmacies and 29 hospitals are gathered using GIS. Second, a set covering
mathematical model is handled to determine coverage capability of current and
potential pharmacy warehouses and minimize the number of warehouses to be
opened. Finally, P-center and P-median mathematical models are applied to open
potential warehouses and to assign pharmacies & hospitals to the opened
warehouses so that the total distance and the demand’s longest distance to the
source are minimized. Developed integer programming (IP) models and GIS
software are compared with on a case study. Computational experiments prove
that our approach can find new potential pharmacy warehouses which cover
wider areas than current warehouses to service pharmacies and hospitals in the
city.
Keywords:
P-median
P-center
Set covering
GIS
Network analysis
AMS Classification 2010:
90B90, 90B80
1. Introduction
In health care services context, pharmacies are the
medicine markets that we try to reach quickly in case
of any illness. Pharmacists are part of the healthcare
team and provide advice to patients, case
management, and benefits management. Thus,
pharmacists have an important role in helping prevent
medication errors and in identifying drug interactions
and pharmaceutical care is an important aspect of the
spectrum of healthcare.
Continuous expansions of the city, development of
multi-center urban structure and changes in population
density have affected the spatial distribution of needs
and demand for pharmacies. The aforementioned
challenges make utilization of effective health care
services more difficult. Besides rural regions, urban
areas may also be unable to get transportation to the
nearest pharmacy due to mentioned obstacles. While
the growth of Internet and mail-order pharmacies
might suggest that geographical limits to access are no
longer a concern, many rural and urban residents do
not have the equipment, technical skills, and/or
telecommunications accessibility that these services
require [1].
Especially in developing countries, pharmacies play
an important role, in providing information and advice
on health to low-income people. However, unbalanced
distribution of pharmacies with respect to population
and resources (such as warehouses and hospitals)
would severely limit the accessibility of pharmacy
services.
Thus, one of the principal reasons for the success of a
pharmacy is suitable location and number of existing
pharmacies. Despite this, locations and selection of

118 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
new pharmacies are too often selected in an
unscientific manner. Sometimes pharmacies suffer
because they are just outside the flow of traffic [2].
Unless quantitative location-allocation models are
used, the final decision may be given on pragmatic
considerations which can result far from optimal.
Pharmacy distribution depends greatly on
geographical location; approximately 35.45% of
community pharmacies are found in Istanbul
(19.90%), Ankara (8.32%) and Izmir (7.23%), where
30.60% of the population lives. Table 1 indicates top
10 cities in terms of population with number of
pharmacies, number of people per pharmacy and
number of required pharmacies. The regulation about
controlling of number of pharmacies was published in
the Turkish official gazette on May 17, 2012.
According to published directive, number of
pharmacies is determined per 3500 people. As it can
be seen from Table 1, there are 4840 pharmacies
which serve all people in İstanbul while 4188
pharmacies are enough. So, 652 pharmacies in
İstanbul are surplus. As opposite, 75 pharmacies are
deficit in Gaziantep which is the 8th most crowded city
in Turkey. Totally 1821 pharmacies are unnecessary
in Turkey [3]. The most important indicator in Table 1
is that, although there are redundant pharmacies in
Turkey, optimal location and allocation of existing
pharmacies is lacking.
Table 1. Top 10 cities with pharmacies in Turkey [4].
Cities
No.
Pharmacies
Population
No.
People
per
Pharmacy
No.
Required
Pharmacies
Gap
İstanbul
4840
14657434
3029
4188
652
Ankara
2023
5270575
2606
1506
517
İzmir
1759
4168415
2370
1191
568
Bursa
828
2842547
3434
813
15
Antalya
1013
2288456
2260
654
359
Adana
653
2183167
3344
624
29
Konya
711
2130544
2997
609
102
Gaziantep
477
1931836
4050
552
-75
Şanlıurfa
370
1892320
5115
541
-171
Kocaeli
431
1780055
4131
509
-78
Turkey
24319
78741053
3238
22498
1821
Many factors as proximity to hospitals, proximity to
pharmacy warehouses and coverage level are effective
in spatial distribution of pharmacies in settlement
areas. This distribution is noteworthy in urban places
especially in metropolitan areas. Thus spatial
distribution of pharmacies affects their accessibility
and provided services which must be socially
available. To give satisfactory decisions for location
and allocation of pharmacies, mathematical models
and GISs are the most common tools in literature and
practice [5].
Considering this situation, in this paper; current and
possible new locations of pharmacy warehouses in
Gaziantep are investigated to provide optimal
distribution of hospitals and pharmacies. To do so, a
two-step approach is followed. First, geographic
information of 10 current and 10 potential pharmacy
warehouses, 231 pharmacies and 29 hospitals are
gathered using GIS. Secondly, set covering, P-center
and P-median models are applied to setup potential
warehouses then assign pharmacies and hospitals to
the opened warehouses so that the total transportation
distance can be minimized. Then this approach is
applied to an illustrative case study in Gaziantep.
The remainder of the paper is organized as follows.
Next section, we provide an overview and a summary
of the existing literature of mathematical location-
allocation models and GIS on healthcare services.
Section 3, describes and gives details about proposed
location-allocation models. Section 4 contains both
computational experiments and a case study, and
finally Section 5 presents our conclusion.
2. Literature review
This section presents a brief review on the location-
allocation models for healthcare service problems,
followed by the same steps for GIS applications.
2.1. Location-allocation models on healthcare
services
Location-allocation models try to determine the
optimal location for facilities and assign customers to
these facilities in order to meet their demands. There
are many studies in the literature related to facility
location problems, which attracts the researchers for
more than 50 years. In this context, the studies of
Daskin [6], Owen and Daskin [7], Narula [8], Arabani
and Farahani [9] can be examined. The location-
allocation problems can be classified generally as
public location problems (e.g., school, clinics,
hospital, ambulance etc.) and private location
problems (e.g., retail store, industrial facilities etc.).
While cost minimization is important in private
location problems, it is more important to ensure the
accessibility of the facility in public location problems
[10].
The application of location-allocation models in
healthcare services are explained in Rahman and
Smith [11], Daskin and Dean [12], Rais and Viana
[13] and Afshari and Peng [14]. In Rahman and Smith
[11], the location-allocation models for healthcare
service are gathered in 2 categories such as single
level models and hierarchical models. The single level
models are used for determining the most suitable
places for health care system facilities. P-median, P-
center, set covering and maximal covering models are
evaluated in this perspective. Hierarchical models are
problems in which the upper level and lower level
facilities are considered together [15]. Mestre et al.
[16], Farahani et al. [17] and Teixeira and Antunes
[18] can be examined as examples of hierarchical
models in healthcare services.
A summary of the literature related to the single-level
facility location-allocation models are given in Table
2. Also, Harper et al. [28], Abdelaziz and Masmoudi
[29] and Mestre et al. [30], suggested stochastic
models for planning healthcare facilities. Lovejoy and
Li [31], Stummer et al. [32] have proposed multi

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 119
objective approaches in the literature.
Table 2. A summary of the literature.
Source
Solution Method
Application Area
Berghmans et
al. [19]
P-center and set covering
models
Determining the number of
new healthcare facility in
Saudi Arabia
Tavakoli and
Lightner [20]
Set covering model
Locating/allocating
emergency vehicles in
Fayetteville, NC
Jia et al. [21]
Maximal covering model
Determining the facility
locations of medical
supplies
Jia et al. [22]
P-median, P-center and
covering models
Optimizing the locations of
facilities for medical
supplies in Los Angeles
Shariff et al.
[23]
Capacitated maximal
covering model
New healthcare facility
location in Malaysia
Valipour et
al. [24]
Maximal covering model
and particle swarm
optimization
Determining new
healthcare facility locations
Jia et al. [25]
Modified P-median model
Determining three location
for healthcare facility in
China
Kunkel et al.
[26]
P-median and capacitated
facility location models
Distribution of health
resources in Malawi
Guerriero et
al. [27]
P-median, P-center, set
covering models and
mathematical formulation
for network reorganization
problem
Public hospital network
reorganization in Italy
2.2. GIS applications on healthcare services
GIS is a computer based system that collects, stores,
analyzes and displays spatial data according to their
locations [33]. The most powerful aspect of GIS is
performing spatial analyses for getting information in
many fields. Network analysis has been used
extensively to examine relationships between
organizations. This type of analysis can be used to
find the shortest routes or to find the service areas of
facilities. GIS has become an important tool in
healthcare activities such as database management,
planning, emergency situations, service area problems
etc.[34,35]. It is also used as a decision making
system that helps the managers in better planning,
utilization of available health resources and improving
health care delivery [35, 36].
Lovett et al [37] examined accessibility to surgeries by
GIS. High-risk emergency maps are generated by
Grekousis and Photis [38]. They analyzed health
emergency data and revealing relationships in GIS, in
order to show where strokes are likely to occur.
Geographic distribution is used to compare GP clinics
and musculoskeletal health care clinics in Sanders et
al. [39]. Travel distance between women with breast
cancer and the nearest mammography facility is
analyzed by Huang et al. [40]. Pearce et al. [41]
applied GIS to calculate travel time for geographical
access to health facilities. Network analysis is used to
select rotary air transport or ground transport of a burn
care facility by Klein et al. [42], McLafferty [36]
provide timely emergency responses for ambulance
services.
As it seen from the reviewed studies in above,
application of mathematical modeling and GIS
approaches to location and allocation problems in
healthcare is still lacking. To the best of our
knowledge, the proposed study which applies three
different location and allocation models and GIS to
pharmacy warehouses location and allocation problem
is the first as a case study. The contributions of this
paper are twofold and are stated as follows: (i) To
apply well-known three location-allocation models to
pharmacy warehouses distribution problem, and (ii)
To compare IP models and GIS software. In practical
side, potential pharmacies offered by the proposed
model provide better service quality than the current
pharmacies.
3. Location-allocation models
Pharmacy logistics is an important issue in healthcare
services. Thus, determining the locations of
pharmacies and pharmacy warehouses are strategic
decisions. In this section, the location-allocation
models -which are used in this study to ensure the
optimal distribution of the pharmacy warehouses to
hospitals and pharmacies-, are described.
3.1. Set covering problem
G (N, A) is a fully connected network and N is the set
of nodes while A is set of edges between these nodes.
N consists of nodes, I consists of customers and K
consists of potential warehouses. There are distances
identified as dik between all node pairs within the
network. The set covering problem is identified as a
facility location selection problem in a way to reach
every cluster at least once in a predetermined time on
this network. Farahani et al. [43], Caprara et al. [44]
and Li et al. [45] can be examined as set covering
problem examples. The formulation of the set
covering problem is as follows [46]:
Decision variables:
  󰇛
 󰇜 
Objective function:
   (1)
 
 
    (2)
 󰇝 󰇞    (3)
The objective function (1) is to minimize the number
of facilities to be opened. Constraint (2) is to provide
service from at least one opened warehouse to all
pharmacies and hospitals within the predetermined
time. Constraint (3) is the integrality constraint of the
decision variable. Here,  is 1, if can be reached
from k to i in a predetermined time; 0 otherwise.
3.2. P-median problem
On the network which is defined in sub-section 3.1,
positive demand identified as  and transportation
costs per unit between all customers identified as 
are taken into consideration. The P-median problem

120 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
tries to determine P amount candidate facility that is
to open and which customers will be assigned to each
facility. The P-median problem was examined in
literature for the first time by Hakimi [47]. Kariv and
Hakimi [48] proved that the problem is a
combinatorial NP-Hard problem. The formulation of
the P-median problem is as follows [18]:
Decision variables:
  󰇛
 󰇜 
   
󰇛     󰇜 
Objective function:
     (4)
 
      (5)
         (6)
   (7)
   󰇝 󰇞       (8)
The objective function (4) is to minimize total costs.
Constraint (5) provides the assignment of each
customer to a warehouse, while Constraint (6)
provides the assignment of customers to the opened
warehouses Constraint (7) determines the number of
warehouses which should be opened. Constraint (8) is
the integrality constraint of the decision variables.
3.3. P-center problem
The P-center problem tries to determine P amount
candidate facility that is to open and which customers
will be assigned to each facility while minimizing the
customer’s longest distance to the facility. The
formulation of the P-center problem is as follows [6]:
Decision variables:
  󰇛
 󰇜 
   
󰇛     󰇜 
Objective function:
  󰇛 󰇜 (9)
 
Constraints (5) to (8)
For the linearization of the model the MaxL decision
variable is added. The objective function is written as
   and     and   
constraints are added to the model.
4. Computational experiments
In this section, the current and potential locations of
pharmacy warehouses in the province of Gaziantep are
examined and the results are discussed using
mathematical models described in the previous
section. Finally, GIS software results and proposed
mathematical model’s results are compared.
4.1. Case study
This section presents the results of implementing the
proposed technique on a city-wide area. Gaziantep is
the 8th most crowded city of Turkey. The city has a
mean elevation of 706 meters, and in 2015, its
population was 1,931,836 with a total acreage of
7,642km2. The city is an important commercial and
industrial center for Turkey and it is located at
37°04′North, 37°23′East. The biggest two districts of
Gaziantep, namely Şehitkamil and Şahinbey, are
considered as our study area (Figure 1).
Figure 1. Location map of the study area.
Firstly, 231 pharmacies, 29 hospitals, 10 current
warehouses and potential 10 pharmacy warehouses are
determined with GIS then the distances are calculated.
The locations of potential pharmacy warehouses are
determined by Gaziantep Chamber of Pharmacies. All
facilities in the case study are shown in Figures 2 and
3. The spatial positions of every facility (hospitals,
pharmacies, current and potential pharmacy
warehouses) are defined by geographic coordinates
(longitude and latitude). ESRI ArcGIS 10.2 software
as a GIS tool is used to calculate the real distances
between the facilities in the network.
Figure 2. Considered 29 hospitals and 231 pharmacies in
Gaziantep city center.
After determining the all facility locations, road
network of Gaziantep is used to calculate distance
between facilities rather than top view distances. For
instance, Figure 4 shows the network distance
between 1st current pharmacy warehouse and 190th
pharmacy. While top view distance between two
facilities is 2502 meters, network distance getting
from the road network of Gaziantep is 2993 meters.
The network distances between the all facility types’
are available upon request.

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 121
Figure 3. Considered 10 current and 10 potential pharmacy
warehouses in Gaziantep city center.
Figure 4. Network distance between 1st current pharmacy
warehouse and 190th pharmacy.
4.2. Application of location-allocation models
In this section, three different location-allocation
models named as set covering, P-median and P-center
problems are applied to different scenarios in
Gaziantep city center. Generated scenarios based on
locations of pharmacy warehouses are described in
below:
Scenario1: This is the situation which considers 10
current pharmacy warehouses in Gaziantep city center.
Scenario2: This is the situation which considers 10
potential pharmacy warehouses instead of 10 current
pharmacy warehouses in Gaziantep city center.
Scenario3: This is the situation which considers 10
current and 10 potential pharmacy warehouses
together in Gaziantep city center. In other words, there
are 20 pharmacy warehouses in this scenario.
Set covering, P-median and P-center models are
applied to aforementioned scenarios and results are
given below. It is noted that all IP runs were
completed on a server with 1.8 GHz Intel Core
processor and 4 GB of RAM. The computation time
required to solve the model using the GAMS-CPLEX
solver is less than 10 CPU seconds.
4.2.1. Solution of set covering problem
The set covering model is primarily solved with the
data obtained on the basis of GIS to investigate the
coverage ability of three scenarios. To do so, 6
different coverage areas in the range of 1km and 6km
are examined. The results are presented in Table 3.
Table 3. Results of set covering model using IP.
Coverage
area (m)
Scenarios
No.
demand
points in
coverage
area
No. demand
points out
of the
coverage
area
Opened
warehouses
Number of
opened
warehouses
1000
Scenario1
*
*
*
*
Scenario2
*
*
*
*
Scenario3
*
*
*
*
2000
Scenario1
*
*
*
*
Scenario2
*
*
*
*
Scenario3
*
*
*
*
3000
Scenario1
*
*
*
*
Scenario2
*
*
*
*
Scenario3
*
*
*
*
4000
Scenario1
*
*
*
*
Scenario2
260
0
12-13-15-16
4
Scenario3
260
0
3-8-10-16
4
5000
Scenario1
*
*
*
*
Scenario2
260
0
17-18
2
Scenario3
260
0
17-18
2
6000
Scenario1
260
0
2-9
2
Scenario2
260
0
16-17
2
Scenario3
260
0
2-9
2
*Infeasible solution
The results given in Table 3 indicate that, IP model
cannot find an optimal solution for 1km, 2km and 3km
coverage areas. To make a comparison and get a
detailed solution, set covering tool of ArcGIS
Network Analysis tool is also applied to the problem.
Network Analysis tool is based on the well-known
Dijkstra's algorithm for finding shortest paths. The
classic Dijkstra's algorithm solves a shortest-path
problem on an undirected, nonnegative weighted
graph.
Table 4. Results of set covering model using GIS.
Coverage
area (m)
Scenarios
No.
demand
points in
coverage
area
No.
demand
points
out
of the
coverage
area
Opened
warehouses
Number of
opened
warehouses
1000
Scenario1
105
155
1-2-4-6-7-8-9
7
Scenario2
164
96
11-12-13-14-15-
16-17-18-19-20
10
Scenario3
174
86
1-4-7-9-11-12-13-
14-15-16-17-18-
19-20
14
2000
Scenario1
187
73
1-3-4-5-9
5
Scenario2
234
26
11-12-13-14-15-
16-17-18-19-20
10
Scenario3
238
22
4-5-13-14-16-17-
18-19-20
9
3000
Scenario1
225
35
1-2-3-4-9
5
Scenario2
259
1
12-13-14-16-18-20
6
Scenario3
259
1
1-8-9-13-16-17
6
4000
Scenario1
246
14
3-8-9-10
4
Scenario2
260
0
12-13-15-16
4
Scenario3
260
0
8-10-13-16
4
5000
Scenario1
254
6
3-4-5-9
4
Scenario2
260
0
17-18
2
Scenario3
260
0
17-18
2
6000
Scenario1
260
0
2-9
2
Scenario2
260
0
17-18
2
Scenario3
260
0
9-17
2

122 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
Figure 5. Set covering problem results obtained by GIS
Figure 6. Comparison of IP (left) and GIS (right) for set covering problem (coverage area is 4000m for Scenario 3).
To use it within the context of real-world
transportation data, this algorithm is modified to
respect user settings such as one-way restrictions, turn
restrictions, junction impedances, barriers, and side-
of-street constraints while minimizing a user-specified
cost attribute. The performance of Dijkstra's algorithm
is further improved by using better data structures
such as d-heaps. The d-heap is a priority queue data
structure, a generalization of the binary heap in which
the nodes have d children instead of 2. In additio, the
algorithm needs to be able to model the locations
anywhere along an edge, not just on junctions. Table 4
gives the results obtained by ArcGIS Network
Analysis tool.
According to results of Tables 3 and 4, the following
outcomes can be obtained:
• It is clear that Scenarios 2 and 3 have wider coverage
ability than the Scenario 1 in all coverage area except
in 6km. For example, while current pharmacy
warehouses (Scenario 1) can cover 246 pharmacies
and hospitals, Scenarios 2 and 3 can cover all the
demand points in 4km coverage area. This result
shows that current warehouses are not enough for
supplying hospitals and pharmacies (Figure 5).

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 123
• While IP finds infeasible solutions in some coverage
areas (Table 3), GIS provides detailed results for all
coverage areas (Table 4). However, obtained number
of demand points in and out of coverage areas is the
same for both solutions.
• In some coverage areas, although IP and GIS cover
all demand points, opened pharmacy warehouses can
be different. For instance, while IP model opened 3rd,
8th, 10th and 16th warehouses, GIS opened 8th, 10th,
13th and 16th warehouses for 4km coverage area
(Figure 6). It means that there are at least two ways on
which warehouses will be opened to cover all demand
points.
• As expected, increasing the coverage area also
increases the covered demand points. Increasing the
coverage area from 1km to 6km leads to an increment
from 40% to 100% coverage percentage for current
warehouses (Figure 7).
Table 5. Fixed costs of potential pharmacy warehouses.
Potential pharmacy warehouses
1
2
3
4
5
Fixed cost ()($)
8151
7736
6556
6989
5769
6
7
8
9
10
5942
5368
6252
7076
5360
Figure 7. Coverage percentages in different coverage areas.
In addition to analysis above, set covering problem
with fixed costs of potential pharmacy warehouses are
considered. To do so, data between 5000$ and 1000$
are generated randomly for each potential pharmacy
warehouse (Table 5). A parameter () which
represents the fixed cost of potential warehouse (k) is
added to the objective function (Eq. 1) of set covering
problem.
Table 6. Results of set covering problem with fixed costs solved by IP.
With fixed-costs
Without fixed-costs
Coverage
area(m)
Scenarios
No. demand points
in
coverage area
No. demand points
out
of the coverage area
Opened
warehouses
Number of
opened
warehouses
Opened
warehouses
Number of
opened
warehouses
1000
Scenario2
*
*
*
*
*
*
Scenario3
*
*
*
*
*
*
2000
Scenario2
*
*
*
*
*
*
Scenario3
*
*
*
*
*
*
3000
Scenario2
*
*
*
*
*
*
Scenario3
*
*
*
*
*
*
4000
Scenario2
260
0
12-13-16-
20
4
12-13-15-
16
4
Scenario3
260
0
3-8-10-16
4
3-8-10-16
4
5000
Scenario2
260
0
17-18
2
17-18
2
Scenario3
260
0
3-4-5-16
4
17-18
2
6000
Scenario2
260
0
16-17
2
16-17
2
Scenario3
260
0
2-9
2
2-9
2
* Infeasible solution
Set covering problem with fixed cost is applied to
Scenarios 2 and 3 due to consideration of potential
warehouses. The results are presented in Table 6
which also shows the related part of solutions without
fixed-costs. As it is seen, all demand points are also
covered with fixed costs except in 1, 2 and 3km
coverage areas. There are two different results which
are shown in bold. While, 20th potential warehouse is
opened instead of 15th potential warehouse in
Scenario 2 with 4km coverage area; 3rd, 4th, 5th and
16th current and potential warehouses are chosen
instead of 17th and 18th potential warehouses in
Scenario 3 with 5km coverage area. As expected,
considering the fixed costs of potential warehouses
causes to select current warehouses instead of
potential warehouses in one solution.
4.2.2. Solution of P-median problem
After showing the benefits of potential warehouses,
we implement P-median and P-center models to
assign current and potential warehouses to demand
points (hospitals and pharmacies) so that the total
transportation distance is minimized. P-median model
is implemented assuming the demands are equal
(=1). Due to information privacy, demand data of
hospitals and pharmacies cannot be obtained. We
apply the P-median model for the demand points by
setting 1 to 10 values for p. The results of P-median
problem obtained by IP and GIS are given in Tables 7
and 8, respectively. As it can be seen from Tables 7
and 8, results are also classified based on three
scenarios as set covering problem.
0
20
40
60
80
100
1000 2000 3000 4000 5000 6000
Coverage Percentage (%)
Coverage Area (m)
Scenario1 Scenario2 Scenario3

124 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
Table 7. Results of P-median problem using IP.
Scenario1
Scenario2
Scenario3
P
Total Distance
(m)
Opened
Warehouses
Total Distance
(m)
Opened Warehouses
Total Distance
(m)
Opened Warehouses
1
703648.3
10
676557.4
15
676557.4
15
2
549791.0
4-8
561416.9
15-16
549791.0
4-8
3
473911.7
5-9-10
446711.5
11-15-16
430234.3
6-8-16
4
448085.6
1-4-5-9
389665.1
12-15-16-17
374944.0
8-10-16-17
5
431530.3
1-3-4-8-9
347900.4
12-16-17-19-20
330811.2
8-9-10-16-17
6
418835.5
1-3-4-7-8-9
322475.6
12-16-17-18-19-20
311459.3
5-10-16-17-18-19
7
409915.8
1-3-4-6-7-8-9
305611.0
12-15-16-17-18-19-20
294954.5
7-10-11-16-17-18-19
8
401939.2
1-2-3-4-6-7-8-9
288979.1
11-12-15-16-17-18-19-20
278586.5
7-10-11-13-16-17-18-19
9
399889.8
1-2-3-4-6-7-8-9-10
272611.1
11-12-13-15-16-17-18-19-20
265841.8
4-6-7-11-13-16-17-18-19
10
398401.8
1-2-3-4-5-6-7-8-9-10
261275.8
11-12-13-14-15-16-17-18-19-
20
257254.8
1-4-6-7-11-13-16-17-18-
19
Table 8. Results of P-median problem using GIS.
Scenario1
Scenario2
Scenario3
P
Total Distance (m)
Opened Warehouses
Total Distance (m)
Opened Warehouses
Total Distance (m)
Opened Warehouses
1
703648.3
10
676557.4
15
676557.4
15
2
549791.0
4-8
561416.9
15-16
549791.0
4-8
3
473911.7
5-9-10
446711.5
11-15-16
430234.3
6-8-16
4
448085.6
1-4-5-9
389665.1
12-15-16-17
374944.0
8-10-16-17
5
431530.3
1-3-4-8-9
352926.1
12-15-16-17-18
330811.2
8-9-10-16-17
6
418835.5
1-3-4-7-8-9
322475.6
12-16-17-18-19-20
314443.3
8-9-10-13-16-17
7
409915.8
1-3-4-6-7-8-9
305611.0
12-15-16-17-18-19-20
301660.6
4-6-8-9-13-16-17
8
401939.2
1-2-3-4-6-7-8-9
288979.1
11-12-15-16-17-18-19-20
278586.5
7-10-11-13-16-17-18-19
9
399889.8
1-2-3-4-6-7-8-9-10
272611.1
11-12-13-15-16-17-18-19-20
265841.8
4-6-7-11-13-16-17-18-19
10
398401.8
1-2-3-4-5-6-7-8-9-10
261275.8
11-12-13-14-15-16-17-18-19-20
257770.8
4-7-11-13-14-16-17-18-19-20
According to Table 7, all P-median problems are
solved optimally. Although, the results obtained by
GIS seem similar with the results of IP, all solutions
of GIS are not optimal (Table 8). Results which are
not optimal are shown with bold in Table 8. Figure 8
indicates the optimal (obtained by IP) and non-optimal
(obtained by GIS) solutions for P= 5. As expected,
increasing the number of P decreases the total distance
between warehouses and demand points in all
solutions. Results in Figure 9 show that increasing the
number of pharmacy warehouses from 1 to 10,
decreases the total travelled distance by 43.38%,
61.38% and 61.98% for Scenarios 1, 2 and 3,
respectively.
Another outcome can be seen from Figure 9 that
potential warehouses provide shorter distance than the
current warehouses in all P values except P= 2. While
the gap between current and potential warehouses is
3.85% in P= 1, this gap is increased dramatically by
34.42% in P= 10 (Figure 10). On the other hand,
Scenario 3 outperforms other scenarios in P-median
problem.
In addition to analysis above, P-median problem is re-
solved with generated demand data for three
scenarios. While demand for pharmacies is randomly
generated between 5 and 10 boxes of medicine, range
for hospitals is determined as 20 and 30 boxes of
medicine. Demand dataset is available upon request
from corresponding author. The results of P-median
problem with different demand data obtained by IP are
given in Table 9.
According to Table 9, all P-median problems are
solved optimally. As expected, increasing the number
of P also decreases the total distance when different
demand values exist. In fact, the case with different
demand values provides less travelled distance than
the case with equal demand values. Improvements (%)
in travelled distance are shown in Figure 11. Results
in Figure 11 show that embedding different demand
values into the P-median model improve the solutions
averagely by 6.68%, 8.46% and 8.71% for Scenarios
1, 2 and 3, respectively. It must be noted that changing
the demand values of each pharmacy and hospital can
yield different results.
Figure 8. Comparison of mathematical model (left) and GIS (right) for P-median problem (P=5).

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 125
Figure 9. Comparison of total distances obtained by IP for P-median problem.
Figure 10. Results of P-median problem obtained by IP (P= 10).
Table 9. Results of P-median problem with demand data using IP.
Scenario1
Scenario2
Scenario3
P
Total Distance
(m)
Opened
Warehouses
Total Distance
(m)
Opened Warehouses
Total Distance
(m)
Opened Warehouses
1
6640359.3
10
6340796.2
15
6340796.2
15
2
5171164.4
4-8
5222308.7
15-16
5171164.4
4-8
3
4384727.3
5-6-9
4139945.6
11-15-16
3986775.3
8-10-16
4
4185826.5
4-5-6-9
3624850.3
12-15-16-17
3464420.1
8-10-16-17
5
4008892.3
3-4-6-8-9
3187588.7
11-16-17-19-20
3013817.0
8-9-10-16-17
6
3905634.2
3-4-6-7-8-9
2938938.2
11-16-17-18-19-20
2813233.8
5-10-16-17-18-19
7
3818425.7
1-3-4-6-7-8-9
2763719.7
11-12-16-17-18-19-20
2648571.2
5-10-13-16-17-18-19
8
3741018.6
1-2-3-4-6-7-8-9
2599057.0
11-12-13-16-17-18-19-20
2485439.7
7-10-11-13-16-17-18-19
9
3724589.6
1-2-3-4-6-7-8-9-10
2438867.3
11-12-13-15-16-17-18-19-20
2379573.6
4-6-7-11-13-16-17-18-19
10
3714122.3
1-2-3-4-5-6-7-8-9-
10
2360164.0
11-12-13-14-15-16-17-18-19-
20
2316881.7
4-6-7-11-13-16-17-18-19-20
250000
300000
350000
400000
450000
500000
550000
600000
650000
700000
750000
1 2 3 4 5 6 7 8 9 10
Total distance (m)
P value
Scenario 1 Scenario 2 Scenario 3

126 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
Figure 11. Distance improvements when different demand values are considered.
4.2.3. Solution of P-median problem
In addition to considered set covering and P-median
problems, P-center problem is also investigated to
minimize the longest distance between pharmacy
warehouses and demand points. Table 10 presents the
results of P-center problem obtained by IP. It is noted
that P-center problem cannot be solved via GIS
because of non-availability of the required tool in the
software.
According to Table 10; increasing the number of
warehouses to be opened, decreases the longest
distance between serving warehouses and underserved
pharmacy/hospitals. In the current situation
(Scenario1), the longest distance between source and
demand points is fixed by 5477.8m after opening three
warehouses. On the other hand, the longest distance
between assigned pharmacy warehouse and demand
point is obtained as 3666.7m in Scenarios 2 and 3.
Figure 12 illustrates the improvements in terms of
longest distance for Scenarios 1 to 3. As it can be seen
from Figure 12, the minimum longest distance
(5477.8m) is obtained with 3 warehouses (1-3-9) in
Scenario 1. On the other hand, Scenarios 2 and 3
provide the minimum longest distance (3666.7m) with
5 warehouses. Although Scenario 1 appears like
successful due to succeeding the minimum longest
distance with fewer warehouses, it is clear that P-
center model with 5 warehouses (Scenarios 2 and 3)
leads to shorter longest distance by 33.96% than the
current warehouses situation (Scenario 1).
The results show that with the suggested new
warehouse locations, the current coverage level of
pharmacies and hospitals has increased, the total
transport distance has reduced substantially and the
distance to the demand node, which has the longest
distance to the warehouse, has also decreased.
5. Conclusion
In this paper, current and possible new locations of
pharmacy warehouses in Gaziantep are investigated to
provide optimal distribution to hospitals and
pharmacies. To do so, firstly geographic information
of 10 current and 10 potential pharmacy warehouses,
231 pharmacies and 29 hospitals are gathered using
GIS. Secondly, set covering, P-center and P-median
models are applied to set up potential warehouses and
assign pharmacies and hospitals to the opened
warehouses so that the total transportation distance is
minimized. Computational experiments on the case
study prove that proposed approach can find new
potential pharmacy warehouses which cover wider
area than current warehouses to support pharmacies
and hospitals in the city.
Table 10. Results of P-center problem using IP.
Scenario1
Scenario2
Scenario3
P
Distance (m)
Opened warehouses
Distance (m)
Opened warehouses
Distance (m)
Opened warehouses
1
7321.0
6
7380.1
14
7321.0
6
2
5909.1
2-9
4747.1
17-18
4747.1
17-18
3
5477.8
1-3-9
4674.0
13-17-18
4674.0
3-17-18
4
5477.8
1-3-9-10
3720.9
12-13-14-16
3720.9
1-12-13-16
5
5477.8
1-2-3-5-9
3666.7
12-13-14-16-19
3666.7
8-13-16-19-20
6
5477.8
1-2-3-4-9-10
3666.7
11-12-13-14-16-19
3666.7
9-12-13-14-15-16
7
5477.8
1-2-3-4-6-8-9
3666.7
11-12-13-14-16-18-20
3666.7
1-2-3-4-9-13-16
8
5477.8
1-2-3-4-5-7-8-9
3666.7
11-12-13-14-15-16-18-20
3666.7
1-2-3-4-5-13-16-18
9
5477.8
1-2-3-4-6-7-8-9-10
3666.7
11-12-13-14-15-16-17-18-20
3666.7
1-2-4-6-9-13-16-17-18
10
5477.8
1-2-3-4-5-6-7-8-9-10
3666.7
11-12-13-14-15-16-17-18-19-20
3666.7
1-2-4-7-8-9-11-13-16-20
0
2
4
6
8
10
12
12345678910
Distance improvement (%)
P value
Improvement in Scenario 1 Improvement in Scenario 2

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 127
Figure 12. Results of P-center problem using IP.
Consideration of the study area as city center, testing
the proposed approaches with only the hospitals and
pharmacies, generalization of the proposed method
and determination the locations of potential
warehouses are the limitations and shortcomings of
the paper. To overcome mentioned shortcomings and
direct potential researchers, several extensions to our
method are worth further investigation. First, a web-
based GIS application can be developed. Second,
community health centers can be considered as
another demand points besides hospitals and
pharmacies. Third, investigated area can be expanded.
In this case, heuristics can be required to obtain a near
optimal solution, and finally multi-criteria decision
making tools can be applied to determine alternative
locations.
Acknowledgments
The authors express sincere appreciation to the editor
and two anonymous reviewers for their efforts to
improve the quality of this paper. The authors also
thank Pharmacy Chambers of Gaziantep for their help
and collaboration to collect related data. First author
was supported by the BAGEP Award of the Science
Academy in Turkey.
References
[1] Tekiner, H., Pharmacy in Turkey : past, present,
and future. Pharmazie, 69 (6):477-480 (2014).
[2] Tootelian, D.T., Wertheimer A.I., and
Mikhailitchenko, A., Essentials of pharmacy
management. Pharmaceutical Press (2012).
[3] Turkish Pharmacists Association, (2016) Available
from:http://dergi.tebeczane.net/public_html/ARSIV
-TEBHABERLER/index.html. Accessed 11 Jan
2017.
[4] Population statistics in 2015, (2016). Available

128 E. Özceylan et al. / Vol.7, No.1, pp.117-129 (2017) © IJOCTA
from:http://www.turkstat.gov.tr/PreHaberBultenleri
.do?id=6178. Accessed 11 Jan 2017.
[5] Dokmeci, V., and Ozus, E., Spatial analysis of
urban pharmacies in Istanbul. European Planning
Studies, 12:585-594 (2004).
[6] Daskin, M.S., Network and discrete Locations:
Models, algorithms and applications. Wiley and
Sons, New York (1995).
[7] Owen, S.H., and Daskin, M.S., Strategic facility
location: A review. European Journal of
Operational Research, 111 (3):423-447 (1998).
[8] Narula, S.C., Minisum hierarchical location-
allocation problems on a network: A survey.
Annals of Operations Research, 6 (8):255-272
(1986).
[9] Arabani, A.B., and Farahani, R.Z., Facility location
dynamics: An overview of classifications and
applications. Computers & Industrial Engineering,
62 (1):408-420 (2012).
[10] ReVelle, C.S., and Eiselt, H.A., Location analysis:
A synthesis and survey. European Journal of
Operational Research, 165 (1):1-19 (2005).
[11] Rahman, S., and Smith, D.K., Use of location-
allocation models in health service development
planning in developing nations. European Journal
of Operational Research, 123 (3):437-452 (2000).
[12] Daskin, S., and Dean, L., Location of health care
facilities. Handbook of OR/MS in Health Care: A
Handbook of Methods and Applications, 43–76
(2004).
[13] Rais, A., and Viana, A., Operations Research in
Healthcare: a survey. International Transactions in
Operational Research, 18 (1):1-31 (2011).
[14] Afshari,H., and Peng,Q., Challenges and Solutions
for Location of Healthcare Facilities. Industrial
Engineering & Management, 03 (02) (2014).
[15] Şahin, G., Süral, H., and Meral, S., Locational
analysis for regionalization of Turkish Red
Crescent blood services. Computers & Operations
Research, 34 (3):692-704 (2007).
[16] Mestre, A., Oliveira, M.,D., and Barbosa-Póvoa,
A., Organizing hospitals into networks: a
hierarchical and multiservice model to define
location, supply and referrals in planned hospital
systems. OR spectrum, 34 (2):319-348 (2012).
[17] Farahani, R.Z., Hekmatfar, M., Fahimnia, B., and
Kazemzadeh, N., Hierarchical facility location
problem: Models, classifications, techniques, and
applications. Computers & Industrial Engineering,
68:104-117 (2014).
[18] Teixeira, J.C., and Antunes, A.P., A hierarchical
location model for public facility planning.
European Journal of Operational Research, 185
(1):92-104 (2008).
[19] Berghmans, L., Schoovaerts, P., and Teghem, J.,
Implementation of Health Facilities in a New City.
The Journal of the Operational Research Society,
35 (12):1047-1054 (1984).
[20] Tavakoli, A., and Lightner, C., Implementing a
mathematical model for locating EMS vehicles in
fayetteville, NC. Computers & Operations
Research, 31 (9):1549-1563 (2004).
[21] Jia, H., Ordóñez, F., and Dessouky, M., Solution
approaches for facility location of medical supplies
for large-scale emergencies. Computers &
Industrial Engineering, 52 (2):257-276 (2007).
[22] Jia, H., Ordóñez, F., and Dessouky, M., A modeling
framework for facility location of medical services
for large-scale emergencies. IIE transactions, 39
(1):41-55 (2007).
[23] Shariff, R.S.S., Moin, N.H., Omar, M., Location
allocation modeling for healthcare facility planning
in Malaysia. Computers & Industrial Engineering,
62 (4):1000-1010 (2012).
[24] Valipour, M.T., Nedjati, A., and Kazemi, R.,
Solving Health Care Facility Location Problems
with New Heuristic Algorithm Method.
International Journal of Modeling and
Optimization,12-14 (2013).
[25] Jia, T., Tao, H., Qin, K., Wang, Y., Liu, C., and
Gao, Q., Selecting the optimal healthcare centers
with a modified P-median model: a visual analytic
perspective. International journal of health
geographics, 13 (1):1 (2014).
[26] Kunkel, A.G., Van Itallie, E.S., and Wu, D.,
Optimal distribution of medical backpacks and
health surveillance assistants in Malawi. Health
care management science (2013).
[27] Guerriero, F., Miglionico, G., and Olivito, F.,
Location and reorganization problems: The
Calabrian health care system case. European
Journal of Operational Research, 250 (3):939-954
(2016).
[28] Harper, P., Planning health services with explicit
geographical considerations: a stochastic location-
allocation approach. Omega, 33 (2):141-152
(2005).
[29] Abdelaziz, F.B., and Masmoudi, M., A
multiobjective stochastic program for hospital bed
planning. Journal of the Operational Research
Society, 63 (4):530-538 (2012).
[30] Mestre, A.M., Oliveira, M.D., and Barbosa-Póvoa,
A.P., Location–allocation approaches for hospital
network planning under uncertainty. European
Journal of Operational Research, 240 (3):791-806
(2015).
[31] Lovejoy, W.S., and Li, Y., Hospital operating room
capacity expansion. Management Science, 48
(11):1369-1387 (2002).
[32] Stummer, C., Doerner, K., Focke, A., and
Heidenberger, K., Determining location and size of

Optimizing the location-allocation problem of pharmacy warehouses: A case study in Gaziantep 129
medical departments in a hospital network: A
multiobjective decision support approach. Health
care management science, 7 (1):63-71 (2004).
[33] Bansal, V.K., Application of geographic
information systems in construction safety
planning. International Journal of Project
Management, 29 (1):66-77 (2011).
[34] Keyser, J.J., Book review. The Journal of Hand
Surgery, 39 (8):1649-1650 (2014).
[35] Minutha, A., and Sannasiddanannavar, S.S.,
Planning for public health care services in
Nanjangud Taluk a spatial analysis using GIS,
Indian Streams Research Journal 4 (2):1-5 (2014).
[36] McLafferty, S.L., GIS and health care. Annual
review of public health, 24 (1):25-42 (2003).
[37] Lovett, A., Haynes, R., Sünnenberg, G., and Gale,
S., Car travel time and accessibility by bus to
general practitioner services: a study using patient
registers and GIS. Social Science & Medicine, 55
(1):97-111 (2002).
[38] Grekousis, G., and Photis, Y.N., Analyzing high-
risk emergency areas with GIS and neural
networks: The case of Athens, Greece. The
Professional Geographer, 66 (1):124-137 (2014).
[39] Sanders, L.J., Aguilar, G.D., and Bacon, C.J., A
spatial analysis of the geographic distribution of
musculoskeletal and general practice healthcare
clinics in Auckland, New Zealand. Applied
Geography, 44:69-78 (2013).
[40] Huang, B., Dignan, M., Han, D., and Johnson, O.,
Does distance matter? Distance to mammography
facilities and stage at diagnosis of breast cancer in
Kentucky. The Journal of Rural Health, 25 (4):366-
371 (2009).
[41] Pearce, J., Witten, K., Hiscock, R., and Blakely, T.,
Are socially disadvantaged neighbourhoods
deprived of health-related community resources?
International journal of epidemiology, 36 (2):348-
355 (2007).
[42] Klein, M.B., Kramer, C.B., Nelson, J., Rivara, F.P.,
Gibran, N.S., and Concannon, T., Geographic
access to burn center hospitals. JAMA, 302
(16):1774-1781 (2009).
[43] Farahani, R.Z., Asgari, N., Heidari, N., Hosseininia,
M., and Goh, M., Covering problems in facility
location: A review. Computers & Industrial
Engineering, 62 (1):368-407 (2012).
[44] Caprara, A., Toth, P., and Fischetti, M., Algorithms
for the set covering problem. Annals of Operations
Research, 98 (1-4):353-371(2000).
[45] Li, X., Zhao, Z., Zhu, X., and Wyatt, T., Covering
models and optimization techniques for emergency
response facility location and planning: a review.
Mathematical Methods of Operations Research, 74
(3):281-310 (2011).
[46] Beasley, J.E., An algorithm for set covering
problem. European Journal of Operational
Research, 31 (1):85-93 (1987).
[47] Hakimi, S.L.,Optimum locations of switching
centers and the absolute centers and medians of a
graph. Operations research, 12 (3):450-459 (1964).
[48] Kariv, O., and Hakimi, S.L., An algorithmic
approach to network location problems. II: The p-
medians. SIAM Journal on Applied Mathematics,
37 (3):539-560 (1979).
Eren Özceylan is an assistant professor in Industrial
Engineering Department, Gaziantep University,
Gaziantep, Turkey. He received his PhD from Selçuk
University, Computer Engineering in 2013. His research
focuses on logistics and supply chain management.
Ayşenur Uslu graduated from the Industrial Engineering
Department of Selçuk University, Turkey, in 2014. She
received her MS in Industrial Engineering from Gazi
University in 2016, Ankara, Turkey. She is research
assistant at the Department of Industrial Engineering of
the Başkent University, Ankara, Turkey.
Mehmet Erbaş is working at General Command of
Mapping in Ankara. His research and teaching interests
focus on the topics of the Geographic Information
Systems and Remote Sensing Applications.
Cihan Çetinkaya has graduated from the Turkish
Military Academy in 2006. He received his MS and PhD
in Industrial Engineering Department of Gazi University
in 2011 and 2014, respectively. He is an Assistant
Professor at the Department of Industrial Engineering at
Gaziantep University, Turkey.
Selçuk Kürşat İşleyen graduated from the Industrial
Engineering Department of Gazi University, Turkey, in
2001. He received his MS and PhD in Industrial
Engineering from the same university in 2004 and 2008,
respectively. He is Associate Professor at the Department
of Industrial Engineering of Gazi University, Turkey.
An International Journal of Optimization and Control: Theories & Applications (http://ijocta.balikesir.edu.tr)
This work is licensed under a Creative Commons Attribution 4.0 International License. The authors retain ownership of the
copyright for their article, but they allow anyone to download, reuse, reprint, modify, distribute, and/or copy articles in
IJOCTA, so long as the original authors and source are credited. To see the complete license contents, please visit
http://creativecommons.org/licenses/by/4.0/.