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Lower and upper bounds for a two-stage capacitated facility location problem with handling costs

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  • Li, Jinfeng
  • Chu, Feng
  • Prins, Christian
  • Zhu, Zhanguo

Abstract

We study in this paper multi-product facility location problem in a two-stage supply chain in which plants have production limitation, potential depots have limited storage capacity and customer demands must be satisfied by plants via depots. In the paper, handling cost for batch process in depots is considered in a realistic way by a set of capacitated handling modules. Each module can be regards as alliance of equipment and manpower. The problem is to locate depots, choose appropriate handling modules and to determine the product flows from the plants, opened depots to customers with the objective to minimize total location, handling and transportation costs. For the problem, we developed a hybrid method. The initial lower and upper bounds are provided by applying a Lagrangean based on local search heuristic. Then a weighted Dantzig–Wolfe decomposition and path-relinking combined method are proposed to improve obtained bounds. Numerical experiments on 350 randomly generated instances demonstrate our method can provide high quality solution with gaps below 2%.

Suggested Citation

  • Li, Jinfeng & Chu, Feng & Prins, Christian & Zhu, Zhanguo, 2014. "Lower and upper bounds for a two-stage capacitated facility location problem with handling costs," European Journal of Operational Research, Elsevier, vol. 236(3), pages 957-967.
    • Handle: RePEc:eee:ejores:v:236:y:2014:i:3:p:957-967
    DOI: 10.1016/j.ejor.2013.10.047
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    Cited by:

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    3. Liu, Ming & Liu, Xin & Chu, Feng & Zheng, Feifeng & Chu, Chengbin, 2019. "Distributionally robust inventory routing problem to maximize the service level under limited budget," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 190-211.
    4. Yang, Zhen & Chen, Haoxun & Chu, Feng & Wang, Nengmin, 2019. "An effective hybrid approach to the two-stage capacitated facility location problem," European Journal of Operational Research, Elsevier, vol. 275(2), pages 467-480.
    5. Chandra Ade Irawan & Said Salhi & Kusmaningrum Soemadi, 2020. "The continuous single-source capacitated multi-facility Weber problem with setup costs: formulation and solution methods," Journal of Global Optimization, Springer, vol. 78(2), pages 271-294, October.
    6. Huizhen Zhang & Cesar Beltran-Royo & Bo Wang & Ziying Zhang, 2019. "Two-phase semi-Lagrangian relaxation for solving the uncapacitated distribution centers location problem for B2C E-commerce," Computational Optimization and Applications, Springer, vol. 72(3), pages 827-848, April.

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