Journal
COMPUTERS & OPERATIONS RESEARCH
Volume 39, Issue 7, Pages 1345-1354Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.cor.2011.08.003
Keywords
Distribution; Supply chain network design; Facility location problems; Mixed-integer programming; Lagrangian heuristic
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Designing distribution networks - as one of the most important strategic issues in supply chain management - has become the focus of research attention in recent years. This paper deals with a two-echelon supply chain network design problem in deterministic, single-period, multi-commodity contexts. The problem involves both strategic and tactical levels of supply chain planning including locating and sizing manufacturing plants and distribution warehouses, assigning the retailers' demands to the warehouses, and the warehouses to the plants, as well as selecting transportation modes. We have formulated the problem as a mixed integer programming model, which integrates the above mentioned decisions and intends to minimize total costs of the network including transportation, lead-times, and inventory holding costs for products, as well as opening and operating costs for facilities. Moreover, we have developed an efficient Lagrangian based heuristic solution algorithm for solving the real-sized problems in reasonable computational time. (C) 2011 Elsevier Ltd. All rights reserved.
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