Efficient Production-Distribution System Design

Samir Elhedhli () and Jean-Louis Goffin ()
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Samir Elhedhli: Department of Management Sciences, University of Waterloo, 200 University West, Waterloo, Ontario N2L 3G1, Canada
Jean-Louis Goffin: Faculty of Management, McGill University, 1001 Sherbrooke West, Montreal, Quebec H3A 1G5, Canada

Management Science, 2005, vol. 51, issue 7, 1151-1164

Abstract: The production-distribution system design is an integral part of the general supply chain design. This paper proposes a novel solution methodology for this problem that is based on Lagrangean relaxation, interior-point methods, and branch and bound. Unlike classical approaches, Lagrangean relaxation is applied in a two-level hierarchy, branch and bound is based on a Lagrangean lower bound and column generation (branch and price), while interior-point methods are used within a cutting-plane context (analytic centre cutting-plane method---ACCPM). Numerical results demonstrate that the two-level approach outperforms the classical approach and provides a very sharp lower bound that is the (proven) optimal in most cases.

Keywords: production-distribution systems; Lagrangean relaxation; nested decomposition; interior-point cutting-plane methods; branch and price (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:51:y:2005:i:7:p:1151-1164

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