Journal
COMPUTERS & OPERATIONS RESEARCH
Volume 37, Issue 12, Pages 2182-2191Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.cor.2010.03.008
Keywords
Generalized benders decomposition; Supplier/vendor selection and inventory lot-sizing; Integration of location and inventory decisions; Capacitated economic order quantity problem
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We examine a generalized vendor selection problem of a multi-store firm where the goal is the simultaneous determination of (i) the set of vendors the firm should work with and (ii) how much each store should order from the selected vendors. In addition to the typical costs associated with vendor selection and delivery between the vendors and their assigned stores, we explicitly consider the inventory-related costs and decisions of the stores. We emphasize the relationship between facility location applications and the problem at hand, and we propose an integrated vendor selection and inventory optimization model. Also, arguing that our model creates a venue for precise incorporation of realistic capacity constraints, we model throughput and dispatch capacities, explicitly. The model is a challenging mixed integer nonlinear program for which we propose an efficient solution approach that relies on Generalized Benders Decomposition (GBD). (C) 2010 Elsevier Ltd. All rights reserved.
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