One of the important issues on the distribution network design is to incorporate inventory management cost into the facility location model. This paper deals with a network model making the decisions on the facility location such as the number of DCs and their locations as well as the decisions on the inventory management such as the ordering quantity and the level of safety stock at each DC. The considered model differs from the previous works by classifying the related costs into the operating cost and the investment cost. For this model, a solution procedure based on the Lagrangian relaxation method was proposed and tested for its effectiveness with various numerical examples.
Keywords: location, inventory management, nonlinear programming, lagrangian relaxation
@article{RO_2012__46_2_107_0, author = {Jin, Hyun-Woong}, title = {A study on the budget constrained facility location model considering inventory management cost}, journal = {RAIRO - Operations Research - Recherche Op\'erationnelle}, pages = {107--123}, publisher = {EDP-Sciences}, volume = {46}, number = {2}, year = {2012}, doi = {10.1051/ro/2012011}, mrnumber = {2955460}, zbl = {1248.90009}, language = {en}, url = {http://www.numdam.org/articles/10.1051/ro/2012011/} }
TY - JOUR AU - Jin, Hyun-Woong TI - A study on the budget constrained facility location model considering inventory management cost JO - RAIRO - Operations Research - Recherche Opérationnelle PY - 2012 SP - 107 EP - 123 VL - 46 IS - 2 PB - EDP-Sciences UR - http://www.numdam.org/articles/10.1051/ro/2012011/ DO - 10.1051/ro/2012011 LA - en ID - RO_2012__46_2_107_0 ER -
%0 Journal Article %A Jin, Hyun-Woong %T A study on the budget constrained facility location model considering inventory management cost %J RAIRO - Operations Research - Recherche Opérationnelle %D 2012 %P 107-123 %V 46 %N 2 %I EDP-Sciences %U http://www.numdam.org/articles/10.1051/ro/2012011/ %R 10.1051/ro/2012011 %G en %F RO_2012__46_2_107_0
Jin, Hyun-Woong. A study on the budget constrained facility location model considering inventory management cost. RAIRO - Operations Research - Recherche Opérationnelle, Volume 46 (2012) no. 2, pp. 107-123. doi : 10.1051/ro/2012011. http://www.numdam.org/articles/10.1051/ro/2012011/
[1] Lagrangian heuristics for location problems. Eur. J. Oper. Res. 65 (1993) 383-399. | Zbl
,[2] Discrete location theory. Wiley (1990). | MR
, and ,[3] Upper and lower bounds for the single source capacitated location problem. Eur. J. Oper. Res. 151 (2003) 333-351. | MR | Zbl
and ,[4] Network and discrete location : models, algorithms and applications. Wiley (1995). | MR | Zbl
,[5] An inventory-location model : formulation, solution algorithm and computational results. Ann. Oper. Res. 110 (2002) 83-106. | MR | Zbl
, and ,[6] Efficient primal-dual heuristic for a dynamic location problem. Comput. Oper. Res. 34 (2007) 1800-1823. | MR | Zbl
, and ,[7] Location of multiple retail facilities with limited budget constraints - in continuous space. J. Retail. Consum. Serv. 5 (1998) 173-184.
,[8] A dual-based procedure for uncapacitated facility location. Oper. Res. 26 (1978) 992-1009. | MR | Zbl
,[9] A comparative study of approaches to dynamic location problems. Eur. J. Oper. Res. 6 (1981) 133-143. | MR | Zbl
,[10] The Lagrangian relaxation method for solving integer programming problems. Manage. Sci. 27 (1981) 1-18. | MR | Zbl
,[11] Computers and intractability : A guide to the theory of NP-completeness. WH Freeman & Company (1990). | MR | Zbl
and ,[12] Neighborhood search heuristics for the uncapacitated facility location problem, Eur. J. Oper. Res. 150 (2003) 150-162. | MR | Zbl
,[13] Tabu Search. Kluwer, Academic Publishers (1997). | MR | Zbl
and ,[14] Continuous-review, lost-sales inventory models with Poisson demand, a fixed lead time and no fixed order cost. Eur. J. Oper. Res. 176 (2007) 956-963. | Zbl
,[15] A branch-and-price algorithm for the capacitated facility location problem. Eur. J. Oper. Res. 179 (2007) 1109-1125. | Zbl
and ,[16] A heuristic program for locating warehouses. Manage. Sci. 9 (1963) 643-666.
and ,[17] An exact algorithm for large unbounded knapsack problems. Oper. Res. Lett. 9 (1990) 15-20. | MR | Zbl
and ,[18] The (R, Q) inventory policy subject to a compound Poisson demand pattern. Int. J. Prod. Econ. 68 (2000) 307-317.
and ,[19] M. Melo, S. Nickel and F. Saldanha-da-Gama, Dynamic multi-commodity capacitated facility location : a mathematical modeling framework for strategic supply chain planning. Comput. Oper. Res. 33 (2005) 181-208. | Zbl
[20] M. Melo, S. Nickel and F. Saldanha-da-Gama, Facility location and supply chain management - A review. Eur. J. Oper. Res. 196 (2009) 401-412. | MR | Zbl
[21] A simple tabu search for warehouse location. Eur. J. Oper. Res. 157 (2004) 576-591. | MR | Zbl
and ,[22] Incorporating inventory control decisions into a strategic distribution network design model with stochastic demand. Transp. Res. Part E 40 (2004) 183-207.
and ,[23] Engineering statistics. Wiley (1998).
, and ,[24] Capaciated warehouse location model with risk pooling. Nav. Res. Logist. 55 (2008) 295-312. | MR | Zbl
, and ,[25] A three-level supply chain network design model with risk-pooling and lead times. Transp. Res. Part E 46 (2010) 563-581.
, and ,[26] Incorporating inventory and routing costs in strategic location models. Eur. J. Oper. Res. 179 (2007) 372-389. | Zbl
and ,[27] A joint location-inventory model. Transp. Sci. 37 (2003) 40-55.
, and ,[28] Solving the uncapacitated facility location problemusing tabu search. Comput. Oper. Res. 33 (2006) 2563-2589. | MR | Zbl
,[29] Budget constrained location problem with opening and closing of facilities. Comput. Oper. Res. 30 (2003) 2047-2060. | MR | Zbl
, , and ,Cited by Sources: