Title: A Distribution Network Design model for deteriorating item

Authors: Kai Tang, Chao Yang

Addresses: Institute of Management Sciences and Decision, College of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan 430074, PR China. ' Institute of Management Sciences and Decision, College of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan 430074, PR China

Abstract: In this paper, we study the Distribution Network Design problem integrating production, inventory and facilities location, involving a single supplier, some potential Distribution Centres (DCs) and multiple retailers. Distinct from traditional inventory location problems, the product in consideration is deteriorating item of which the deterioration, production and demand rates are all constant. Thus, the problem is to determine how many DCs to be set up, where to locate them, how to serve the retailers using these DCs, as well as the optimal production and inventory policies for the whole distribution network. The goal is to minimise the total deterioration, production, inventory, transportation and facilities location cost. We formulate this problem as a set partitioning mix-integer programming model. This model is a non-deterministic polynomial time-hard problem, so a meta-heuristic solution approach is introduced based on Genetic Algorithms (GA). Numerical examples are given to illustrate the application of the algorithm, and show that GA is an efficient solution approach for this problem.

Keywords: deteriorating items; facilities location; genetic algorithms; GAs; production policy; inventory policy; distribution network design.

DOI: 10.1504/IJLSM.2008.017481

International Journal of Logistics Systems and Management, 2008 Vol.4 No.3, pp.366 - 383

Published online: 12 Mar 2008 *

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