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An integrated model for logistics network design

Jean-François Cordeau (), Federico Pasin and Marius Solomon

Annals of Operations Research, 2006, vol. 144, issue 1, 59-82

Abstract: In this paper we introduce a new formulation of the logistics network design problem encountered in deterministic, single-country, single-period contexts. Our formulation is flexible and integrates location and capacity choices for plants and warehouses with supplier and transportation mode selection, product range assignment and product flows. We next describe two approaches for solving the problem---a simplex-based branch-and-bound and a Benders decomposition approach. We then propose valid inequalities to strengthen the LP relaxation of the model and improve both algorithms. The computational experiments we conducted on realistic randomly generated data sets show that Benders decomposition is somewhat more advantageous on the more difficult problems. They also highlight the considerable performance improvement that the valid inequalities produce in both solution methods. Furthermore, when these constraints are incorporated in the Benders decomposition algorithm, this offers outstanding reoptimization capabilities. Copyright Springer Science+Business Media, LLC 2006

Keywords: Logistics; Network design; Benders decomposition (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/s10479-006-0001-3

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