An integrated supply chain problem: A nested lagrangian relaxation approach

Ali Diabat, Jean Philippe P. Richard

    Research output: Contribution to journalArticle

    Abstract

    The integration of tactical-level with strategic-level decisions in the supply chain represents an opportunity for substantial cost savings and provides a means for companies to gain a competitive advantage. Much of the previous research on supply chain network design has handled facility location decisions and inventory management decisions independently. In this paper, we develop a new joint facility location inventory model that is based on an approximate one-warehouse multi-retailer inventory model for each warehouse, and on the uncapacitated facility location problem. The proposed integer programming model simultaneously makes decisions pertaining to location and inventory policies on two echelons of the supply chain, the warehouse and the retailers. We develop two Lagrangian-relaxation-based algorithms to solve this model, and compare their performance to that of a conventional branch-and-bound algorithm on randomly generated problems.

    Original languageEnglish (US)
    Pages (from-to)303-323
    Number of pages21
    JournalAnnals of Operations Research
    Volume229
    Issue number1
    DOIs
    StatePublished - Jan 1 2015

    Fingerprint

    Lagrangian relaxation
    Integrated supply chain
    Warehouse
    Facility location
    Inventory model
    Supply chain
    Retailers
    Inventory policy
    Competitive advantage
    Inventory management
    Network design
    Management decisions
    Branch and bound algorithm
    Location problem
    Supply chain network
    Integer programming
    Cost savings
    Location decision

    Keywords

    • Integer programming
    • Integrated models
    • Lagrangian relaxation
    • Location-inventory
    • Supply chain

    ASJC Scopus subject areas

    • Decision Sciences(all)
    • Management Science and Operations Research

    Cite this

    An integrated supply chain problem : A nested lagrangian relaxation approach. / Diabat, Ali; Richard, Jean Philippe P.

    In: Annals of Operations Research, Vol. 229, No. 1, 01.01.2015, p. 303-323.

    Research output: Contribution to journalArticle

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