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Reliable distribution networks design with nonlinear fortification function

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  • Qingwei Li
  • Alex Savachkin

Abstract

Distribution networks have been facing an increased exposure to the risk of unpredicted disruptions causing significant economic losses. The current literature features a limited number of studies considering fortification of network facilities. In this paper, we develop a reliable uncapacitated fixed-charge location model with fortification to support the design of distribution networks. The model considers heterogeneous facility failure probabilities, one layer of supplier backup, and facility fortification within a finite budget. Facility reliability improvement is modelled as a nonlinear function of fortification investment. The problem is formulated as a nonlinear mixed integer programming model proven to be NP$\mathcal {NP}$-hard. A Lagrangian relaxation-based heuristic algorithm is developed and its computational efficiency for solving large-scale problems is demonstrated.

Suggested Citation

  • Qingwei Li & Alex Savachkin, 2016. "Reliable distribution networks design with nonlinear fortification function," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(4), pages 805-813, March.
    • Handle: RePEc:taf:tsysxx:v:47:y:2016:i:4:p:805-813
    DOI: 10.1080/00207721.2014.906682
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    References listed on IDEAS

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    1. Tingting Cui & Yanfeng Ouyang & Zuo-Jun Max Shen, 2010. "Reliable Facility Location Design Under the Risk of Disruptions," Operations Research, INFORMS, vol. 58(4-part-1), pages 998-1011, August.
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    6. Li, Qingwei & Savachkin, Alex, 2013. "A heuristic approach to the design of fortified distribution networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 138-148.
    7. Cui, Tingting & Ouyang, Yanfeng & Shen, Zuo-Jun Max J, 2010. "Reliable Facility Location Design under the Risk of Disruptions," University of California Transportation Center, Working Papers qt5sh2c7pw, University of California Transportation Center.
    8. Seyed Mousavi & Seyed Niaki & Esmaeil Mehdizadeh & Mohammad Tavarroth, 2013. "The capacitated multi-facility location–allocation problem with probabilistic customer location and demand: two hybrid meta-heuristic algorithms," International Journal of Systems Science, Taylor & Francis Journals, vol. 44(10), pages 1897-1912.
    9. Yi-Kuei Lin & Cheng-Ta Yeh, 2013. "Determine the optimal carrier selection for a logistics network based on multi-commodity reliability criterion," International Journal of Systems Science, Taylor & Francis Journals, vol. 44(5), pages 949-965.
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    Cited by:

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    3. Aldrighetti, Riccardo & Battini, Daria & Ivanov, Dmitry & Zennaro, Ilenia, 2021. "Costs of resilience and disruptions in supply chain network design models: A review and future research directions," International Journal of Production Economics, Elsevier, vol. 235(C).
    4. Vahid Nazari-Ghanbarloo & Ali Ghodratnama, 2021. "Optimizing a robust tri-objective multi-period reliable supply chain network considering queuing system and operational and disruption risks," Operational Research, Springer, vol. 21(3), pages 1963-2020, September.

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