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2011•Annals of Operations ResearchOpen access

A Lagrangian relaxation approach to simultaneous strategic and tactical planning in supply chain design

Ali H. Diabat, Jean‐Philippe P. Richard, Craig W. Codrington

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Abstract

We study a multi-echelon joint inventory-location model that simultaneously determines the location of warehouses and inventory policies at the warehouses and retailers. The model is formulated as a nonlinear mixed-integer program, and is solved using a Lagrangian relaxation-based approach. The efficiency of the algorithm and benefits of integration are evaluated through a computational study.

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We study a multi-echelon joint inventory-location model that simultaneously determines the location of warehouses and inventory policies at the warehouses and retailers. The model is formulated as a nonlinear mixed-integer program, and is solved using a Lagrangian relaxation-based approach. The efficiency of the algorithm and benefits of integration are evaluated through a computational study.

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Available abstract

We study a multi-echelon joint inventory-location model that simultaneously determines the location of warehouses and inventory policies at the warehouses and retailers. The model is formulated as a nonlinear mixed-integer program, and is solved using a Lagrangian relaxation-based approach. The efficiency of the algorithm and benefits of integration are evaluated through a computational study.

Key concepts: Lagrangian relaxation, Theory of computation, Supply chain, Mathematical optimization, Relaxation (psychology), Computer science, Facility location problem, Lagrangian

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