A distributed coordination for a single warehouse-multiple retailer problem under private information

Dong Joo Lee and In-Jae Jeong

International Journal of Production Economics, 2010, vol. 125, issue 1, 190-199

Abstract: In this paper, we consider a distributed coordination for single warehouse and multiple retailer problems. The objective is to minimize the sum of the setup cost and inventory holding cost incurring among warehouse and retailers in a distributed manner. We propose two algorithms based on the alternating direction method (ADM) and diagonal quadratic approximation method (DQAM) that utilize Augmented Lagrangian function and multiplier updating scheme. The ADM-based algorithm solves the problem by communicating partial information between a coordinator, the warehouse and retailers. The DQAM-based algorithm does not require a coordinator. The cooperation to minimize the system-wide cost is performed by the direct communication of the warehouse and retailers. The proposed algorithms guarantee 6% deviation from optimal solution in the worst case. The computational experiments and the comparison with existing decentralized approaches are presented.

Keywords: Distributed; coordination; Augmented; Lagrangian; function; Single; warehouse; multiple; retailer (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:125:y:2010:i:1:p:190-199

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