Approximation Algorithms for Integrated Distribution Network Design Problems

Yu Li, Jia Shu, Xi Wang, Naihua Xiu, Dachuan Xu, Jiawei Zhang
2013 INFORMS journal on computing  
I n this paper, we study approximation algorithms for two supply chain network design problems, namely, the warehouse-retailer network design problem (WRND) and the stochastic transportation-inventory network design problem (STIND). These two problems generalize the classical uncapacitated facility location problem by incorporating, respectively, the warehouse-retailer echelon inventory cost and the warehouse cycle inventory together with the safety stock costs. The WRND and the STIND were
more » ... ally studied, respectively, by Teo and Shu (Teo CP, Shu J (2004) Warehouse-retailer network design problem. Oper. Res. 52(3):396-408) and Shu et al. (Shu J, Teo CP, Shen ZJM (2005) Stochastic transportation-inventory network design problem. Oper. Res. 53 (1) :48-60), where they are formulated as set-covering problems, and column-generation algorithms were used to solve their linear programming relaxations. Both problems can be regarded as special cases of the so-called facility location with submodular facility costs proposed by Svitkina and Tardos (Svitkina Z, Tardos É (2010) Facility location with hierarchical facility costs. ACM Trans. Algorithms 6(2), Article No. 37), for which only a logarithmic-factor approximation algorithm is known. Our main contribution is to obtain efficient constant-factor approximation algorithms for the WRND and the STIND, which are capable of solving large-scale instances of these problems efficiently.
doi:10.1287/ijoc.1120.0522 fatcat:yxe6wh23tzehpmrwmt4mvggzri