A Capacitated Location-Inventory Model with Demand Selection

Zhengyi Li, Jiangtao Hai
2019 Journal of Advanced Transportation  
In this paper, we consider an integrated supply chain network design problem, which incorporates inventory and pricing decisions into the capacitated facility location model. We assume that each warehouse has a capacity limitation that limits the average demand flowing through the warehouse and that the supplier can choose whether to satisfy each potential retailer's demand. We formulate the problem as a nonlinear integer programming model and solve the model via a Lagrangian relaxation based
more » ... proach. We develop an efficient algorithm to solve the subproblem that arises from the Lagrangian relaxation procedure. Finally, we conduct extensive computational experiments to test the performance of the algorithms proposed in this paper and provide the managerial insights based on the computational results.
doi:10.1155/2019/2143042 fatcat:f36xwwfqq5dlblqi2oxtrcxdha