Title: A memetic algorithm for integrated location-inventory problem to optimise the total cost and customer service level

Authors: G. Reza Nasiri; Ali Fallah; Hamid Davoudpour

Addresses: Department of Industrial Engineering, Faculty of Engineering, Alzahar University, North Sheikh Bahaee St., Deh-e Vanak 19938-93973, Tehran, Iran ' Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, Hafez Av., Valiasl Square, 159163-4311, Tehran, Iran ' Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, Hafez Av., Valiasl Square, 159163-4311, Tehran, Iran

Abstract: This paper proposes a mixed integer nonlinear mathematical formulation for an integrated location/allocation problem with uncertain demands. The model includes inventory policy, service level optimisation, logistics decisions and transportation modes. Two integrated and sequential solution approaches based on the memetic algorithm are used to solve the real-size problems. Furthermore, an upper bound inventory approximation is proposed for improvement of capacity planning. The implementation outputs indicate that integrated procedure results are considerable for a wide range of problem sizes, with average cost saving about 1.8%. The ANOVA analysis shows that the difference between CPU time values of the two procedures is significant. More detailed analysis is provided to prove the efficiency of the proposed solution approach.

Keywords: service level optimisation; inventory control decisions; capacity planning; distribution network design; risk pooling effect; memetic algorithm.

DOI: 10.1504/IJISM.2022.124404

International Journal of Integrated Supply Management, 2022 Vol.15 No.3, pp.253 - 279

Received: 25 Mar 2021
Accepted: 08 Jul 2021
Published online: 26 Jul 2022 *

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