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A Lagrangian-Based Solution Algorithm For Strategic Supply Chain Distribution Design In Uncertain Environment

Author

Listed:
  • G. REZA NASIRI

    (Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran)

  • HAMID DAVOUDPOUR

    (Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran)

  • BEHROOZ KARIMI

    (Department of Industrial Engineering, Amirkabir University of Technology, Hafez Avenue, Tehran, P.O.Box, 15875-4413, Iran)

Abstract

In this paper a multi-product, multi-echelon location–allocation model for the optimization of a supply chain design is proposed. This model integrated inventory decisions into distribution network design with stochastic market demands. The goal is to select the optimum numbers, locations, and capacities of the opening warehouses so that all customer demands to be satisfied at minimum total costs of the distribution network. We develop a nonlinear mixed-integer model and propose an efficient heuristic solution procedure for the problem. The solution approach is based on Lagrangian relaxation, improved with efficient heuristic to solve complex sub-problems. Computational results indicate that the proposed method yields good solutions with high quality within a reasonable computational time for various real-size problems.

Suggested Citation

  • G. Reza Nasiri & Hamid Davoudpour & Behrooz Karimi, 2010. "A Lagrangian-Based Solution Algorithm For Strategic Supply Chain Distribution Design In Uncertain Environment," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 393-418.
    • Handle: RePEc:wsi:ijitdm:v:09:y:2010:i:03:n:s0219622010003877
    DOI: 10.1142/S0219622010003877
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    Cited by:

    1. Kun Guo & Qishan Zhang, 2017. "A Discrete Artificial Bee Colony Algorithm for the Reverse Logistics Location and Routing Problem," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 16(05), pages 1339-1357, September.

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