A memetic algorithm for integrated location-inventory problem to optimise the total cost and customer service level

G. Reza Nasiri, Ali Fallah and Hamid Davoudpour

International Journal of Integrated Supply Management, 2022, vol. 15, issue 3, 253-279

Abstract: This paper proposes a mixed integer nonlinear mathematical formulation for an integrated location/allocation problem with uncertain demands. The model includes inventory policy, service level optimisation, logistics decisions and transportation modes. Two integrated and sequential solution approaches based on the memetic algorithm are used to solve the real-size problems. Furthermore, an upper bound inventory approximation is proposed for improvement of capacity planning. The implementation outputs indicate that integrated procedure results are considerable for a wide range of problem sizes, with average cost saving about 1.8%. The ANOVA analysis shows that the difference between CPU time values of the two procedures is significant. More detailed analysis is provided to prove the efficiency of the proposed solution approach.

Keywords: service level optimisation; inventory control decisions; capacity planning; distribution network design; risk pooling effect; memetic algorithm. (search for similar items in EconPapers)
Date: 2022
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