A Lagrangian relaxation approach to multi-period inventory/distribution planning

A Lagrangian relaxation approach to multi-period inventory/distribution planning

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Article ID: iaor20011152
Country: United Kingdom
Volume: 51
Issue: 3
Start Page Number: 364
End Page Number: 370
Publication Date: Mar 2000
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: distribution, programming: integer
Abstract:

We consider a multi-period inventory/distribution planning problem (MPIDP) in a one-warehouse multiretailer distribution system where a fleet of heterogeneous vehicles delivers products from a warehouse to several retailers. The objective of the MPIDP is to minimise transportation costs for product delivery and inventory holding costs at retailers over the planning horizon. In this research, the problem is formulated as a mixed integer linear program and solved by a Lagrangian relaxation approach. A subgradient optimisation method is employed to obtain lower bounds. We develop a Lagrangian heuristic algorithm to find a good feasible solution of the MPIDP. Computational experiments on randomly generated test problems showed that the suggested algorithm gave relatively good solutions in a reasonable amount of computation time.

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