Title: Multi-products location–routing problem integrated with inventory under stochastic demand
Author: Seyed Reza Sajjadi, S. Hossein Cheraghi
Wichita State University, 2330 N Oliver, Apt#110, Wichita, KS 67220, USA.
School of Engineering, Western New England College, Springfield, MA 01095, USA
Abstract: The location–routing problem (LRP) deals with simultaneously selecting (locating) one or more facilities from a set of potential facilities (locations), and assigning customers to the selected facilities. Since LRP and inventory decisions are inter-related, integrating them can lead to a more efficient supply chain. Therefore, to improve the operation of the supply chain process, this paper presents a model that integrates inventory control, as a tactical decision, with the LRP. The presented model considers the multi-product network under the fixed order interval inventory policy with stochastic demands for products. Moreover, third-party logistics offers excess space for selected warehouses if needed. This paper also presents a solution approach based on simulated annealing that solves problems with the size of 40 products and 350 customers in reasonable run time.
Keywords: location routing; inventory control; supply chain integration; supply chain management; SCM; multi-product network; facilities location; multi-product networks; fixed order interval inventory policy; third-party logistics; 3PL; simulated annealing.
Int. J. of Industrial and Systems Engineering, 2011 Vol.7, No.4, pp.454 - 476
Available online: 13 Apr 2011