A LAGRANGIAN-BASED SOLUTION ALGORITHM FOR STRATEGIC SUPPLY CHAIN DISTRIBUTION DESIGN IN UNCERTAIN ENVIRONMENT

G. Reza Nasiri (), Hamid Davoudpour () and Behrooz Karimi
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G. Reza Nasiri: Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran
Hamid Davoudpour: Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran
Behrooz Karimi: Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran

International Journal of Information Technology & Decision Making (IJITDM), 2010, vol. 09, issue 03, 393-418

Abstract: In this paper a multi-product, multi-echelon location–allocation model for the optimization of a supply chain design is proposed. This model integrated inventory decisions into distribution network design with stochastic market demands. The goal is to select the optimum numbers, locations, and capacities of the opening warehouses so that all customer demands to be satisfied at minimum total costs of the distribution network. We develop a nonlinear mixed-integer model and propose an efficient heuristic solution procedure for the problem. The solution approach is based on Lagrangian relaxation, improved with efficient heuristic to solve complex sub-problems. Computational results indicate that the proposed method yields good solutions with high quality within a reasonable computational time for various real-size problems.

Keywords: Mathematical programming; supply chain management; distribution planning decisions; inventory control policy; Lagrangian relaxation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0219622010003877

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