Multi-products location–routing problem integrated with inventory under stochastic demand
by Seyed Reza Sajjadi, S. Hossein Cheraghi
International Journal of Industrial and Systems Engineering (IJISE), Vol. 7, No. 4, 2011

Abstract: The location–routing problem (LRP) deals with simultaneously selecting (locating) one or more facilities from a set of potential facilities (locations), and assigning customers to the selected facilities. Since LRP and inventory decisions are inter-related, integrating them can lead to a more efficient supply chain. Therefore, to improve the operation of the supply chain process, this paper presents a model that integrates inventory control, as a tactical decision, with the LRP. The presented model considers the multi-product network under the fixed order interval inventory policy with stochastic demands for products. Moreover, third-party logistics offers excess space for selected warehouses if needed. This paper also presents a solution approach based on simulated annealing that solves problems with the size of 40 products and 350 customers in reasonable run time.

Online publication date: Sat, 31-Jan-2015

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