An improved Lagrangian relaxation-based heuristic for a joint location-inventory problem

Ali Diabat, Olga Battaïa, Dima Nazzal

    Research output: Contribution to journalArticle

    Abstract

    We consider a multi-echelon joint inventory-location (MJIL) problem that makes location, order assignment, and inventory decisions simultaneously. The model deals with the distribution of a single commodity from a single manufacturer to a set of retailers through a set of sites where distribution centers can be located. The retailers face deterministic demand and hold working inventory. The distribution centers order a single commodity from the manufacturer at regular intervals and distribute the product to the retailers. The distribution centers also hold working inventory representing product that has been ordered from the manufacturer but has not been yet requested by any of the retailers. Lateral supply among the distribution centers is not allowed. The problem is formulated as a nonlinear mixed-integer program, which is shown to be NP-hard. This problem has recently attracted attention, and a number of different solution approaches have been proposed to solve it. In this paper, we present a Lagrangian relaxation-based heuristic that is capable of efficiently solving large-size instances of the problem. A computational study demonstrates that our heuristic solution procedure is efficient and yields optimal or near-optimal solutions.

    Original languageEnglish (US)
    Pages (from-to)170-178
    Number of pages9
    JournalComputers and Operations Research
    Volume61
    DOIs
    StatePublished - Sep 1 2015

    Fingerprint

    Distribution Center
    Lagrangian Relaxation
    Heuristics
    Multi-echelon
    Mixed Integer Program
    Location Problem
    Lateral
    Assignment
    NP-complete problem
    Optimal Solution
    Interval
    Lagrangian relaxation
    Distribution center
    Retailers
    Demonstrate
    Commodities

    Keywords

    • Heuristics
    • Integer programming
    • Inventory-location
    • Lagrangian relaxation
    • Location-inventory
    • Supply chain

    ASJC Scopus subject areas

    • Computer Science(all)
    • Modeling and Simulation
    • Management Science and Operations Research

    Cite this

    An improved Lagrangian relaxation-based heuristic for a joint location-inventory problem. / Diabat, Ali; Battaïa, Olga; Nazzal, Dima.

    In: Computers and Operations Research, Vol. 61, 01.09.2015, p. 170-178.

    Research output: Contribution to journalArticle

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