Integer programming solution approach for inventory–production–distribution problems with direct shipments

Integer programming solution approach for inventory–production–distribution problems with direct shipments

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Article ID: iaor2009807
Country: United Kingdom
Volume: 15
Issue: 3
Start Page Number: 259
End Page Number: 281
Publication Date: May 2008
Journal: International Transactions in Operational Research
Authors: ,
Keywords: programming: branch and bound, programming: integer
Abstract:

We construct an integrated multi-period inventory–production–distribution replenishment plan for three-stage supply chains. The supply chain maintains close relationships with a small group of suppliers, and the nature of the products (bulk, chemical, etc.) makes it more economical to rely upon a direct shipment, full-truck load distribution policy between supply chain nodes. In this paper, we formulate the problem as an integer linear program that proves challenging to solve due to the general integer variables associated with the distribution requirements. We propose new families of valid cover inequalities, and we derive a practical closed-form expression for generating them, upon the determination of a single parameter. We study their performances through benchmarking several branch-and-bound and branch-and-cut approaches.

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