A Greedy Heuristic for a Three-Level Multi-Period Single-Sourcing Problem

Edwin Romeijn and Dolores Romero Morales

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: In this paper we consider a model for integrating transportation and inventory decisions in a three-level logistics network consisting of plants, warehouses, and retailers (or customers). Our model includes production and throughout capacity constraints, and minimizes production, holding, and tansportation costs in a dynamic environment. We show that the problem can be reformulated as a certain type of assignment problem with convex objective function. Based on this observation, we propose a greedy heuristic for the problem, and illustrate its behaviour on a class of randomly generated problem instances. These experiments suggest that the heuristic may be asymptotically feasible and optimal with probability one in the number of customers.

Keywords: dynamic demand pattern; dynamic models; heuristic solution approaches; inventory costs; transportation costs (search for similar items in EconPapers)
JEL-codes: M M11 R4 R49 (search for similar items in EconPapers)
Date: 2000-03-31
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