Priority-Based Capacity Allocation for Hierarchical Distributors with Limited Production Capacity

Jun Tong, Xiaotao Zhou and Lei Lei ()
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Jun Tong: School of Management, Zhejiang University of Technology, Hangzhou 310023, China
Xiaotao Zhou: School of Management, Zhejiang University of Technology, Hangzhou 310023, China
Lei Lei: School of Economics and Business Administration, Chongqing University, Chongqing 400044, China

Mathematics, 2024, vol. 12, issue 14, 1-17

Abstract: This paper studies the issue of capacity allocation in multi-rank distribution channel management, a topic that has been significantly overlooked in the existing literature. Departing from conventional approaches, hierarchical priority rules are introduced as constraints, and an innovative assignment integer programming model focusing on capacity selection is formulated. This model goes beyond merely optimizing profit or cost, aiming instead to enhance the overall business orientation of the firm. We propose a greedy algorithm and a priority-based binary particle swarm optimization (PB-BPSO) algorithm. Our numerical results indicate that both algorithms exhibit strong optimization capabilities and rapid solution speeds, especially in large-scale scenarios. Moreover, the model is validated through empirical tests using real-world data. The results demonstrate that the proposed approaches can provide actionable strategies to operators, in practice.

Keywords: hierarchicalchannel management; capacity allocation; limited production capacity; PSO algorithm (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
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