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A simple algorithm for the source-induced fixed-charge transportation problem

Author

Listed:
  • V Adlakha

    (University of Baltimore)

  • K Kowalski

    (State of Connecticut)

Abstract

The fixed-charge problem is a non-linear programming problem of practical interest in business and industry. The source-induced fixed-charge transportation problem (SIFCTP) is a variation of the regular fixed-charge transportation problem (FCTP) in which a fixed cost is incurred for every supply point that is used in the solution, along with a variable cost that is proportional to the amount shipped. This problem is significantly different from the widely studied FCTP, where a fixed cost is incurred upon activation of a route. The introduction of the fixed costs in addition to variable costs results in the objective function being a step function. Therefore, fixed-charge problems are usually solved using sophisticated analytical or computer software. This paper deviates from that approach. It presents a computationally simple algorithm for the solution of source-induced fixed-charge problems. The results of empirical tests of the effectiveness of the proposed algorithm are presented.

Suggested Citation

  • V Adlakha & K Kowalski, 2004. "A simple algorithm for the source-induced fixed-charge transportation problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(12), pages 1275-1280, December.
    • Handle: RePEc:pal:jorsoc:v:55:y:2004:i:12:d:10.1057_palgrave.jors.2601753
    DOI: 10.1057/palgrave.jors.2601753
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    References listed on IDEAS

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    1. Adlakha, Veena & Kowalski, Krzysztof, 1999. "On the fixed-charge transportation problem," Omega, Elsevier, vol. 27(3), pages 381-388, June.
    2. Schaffer, Joanne R. & O'Leary, Daniel E., 1989. "Use of penalties in a branch and bound procedure for the fixed charge transportation problem," European Journal of Operational Research, Elsevier, vol. 43(3), pages 305-312, December.
    3. Warren E. Walker, 1976. "A Heuristic Adjacent Extreme Point Algorithm for the Fixed Charge Problem," Management Science, INFORMS, vol. 22(5), pages 587-596, January.
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    Cited by:

    1. Adlakha, Veena & Kowalski, Krzysztof & Wang, Simi & Lev, Benjamin & Shen, Wenjing, 2014. "On approximation of the fixed charge transportation problem," Omega, Elsevier, vol. 43(C), pages 64-70.
    2. Lev, Benjamin & Kowalski, Krzysztof, 2011. "Modeling fixed-charge problems with polynomials," Omega, Elsevier, vol. 39(6), pages 725-728, December.
    3. Z.N. Chen & C.K.M. Lee & W.H. Ip & G.T.S. Ho, 2012. "Design and evaluation of an integrated inventory and transportation system," Transportation Planning and Technology, Taylor & Francis Journals, vol. 35(4), pages 491-507, January.
    4. Adlakha, Veena & Kowalski, Krzysztof & Lev, Benjamin, 2010. "A branching method for the fixed charge transportation problem," Omega, Elsevier, vol. 38(5), pages 393-397, October.

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