Joint inventory-location problem under the risk of probabilistic facility disruptions
This paper studies a reliable joint inventory-location problem that optimizes facility locations, customer allocations, and inventory management decisions when facilities are subject to disruption risks (e.g., due to natural or man-made hazards). When a facility fails, its customers may be reassigned to other operational facilities in order to avoid the high penalty costs associated with losing service. We propose an integer programming model that minimizes the sum of facility construction costs, expected inventory holding costs and expected customer costs under normal and failure scenarios. We develop a Lagrangian relaxation solution framework for this problem, including a polynomial-time exact algorithm for the relaxed nonlinear subproblems. Numerical experiment results show that this proposed model is capable of providing a near-optimum solution within a short computation time. Managerial insights on the optimal facility deployment, inventory control strategies, and the corresponding cost constitutions are drawn.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 45 (2011)
Issue (Month): 7 (August)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description |
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Li, Xiaopeng & Ouyang, Yanfeng, 2010. "A continuum approximation approach to reliable facility location design under correlated probabilistic disruptions," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 535-548, May.
- Daganzo, Carlos F., 1984. "The length of tours in zones of different shapes," Transportation Research Part B: Methodological, Elsevier, vol. 18(2), pages 135-145, April.
- Ouyang, Yanfeng, 2007. "Design of vehicle routing zones for large-scale distribution systems," Transportation Research Part B: Methodological, Elsevier, vol. 41(10), pages 1079-1093, December.
- Owen, Susan Hesse & Daskin, Mark S., 1998. "Strategic facility location: A review," European Journal of Operational Research, Elsevier, vol. 111(3), pages 423-447, December.
- Li, Xiaopeng & Ouyang, Yanfeng, 2011. "Reliable sensor deployment for network traffic surveillance," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 218-231, January.
- 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.
- Schmitt, Amanda J. & Snyder, Lawrence V. & Shen, Zuo-Jun Max, 2010. "Inventory systems with stochastic demand and supply: Properties and approximations," European Journal of Operational Research, Elsevier, vol. 206(2), pages 313-328, October.
When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:45:y:2011:i:7:p:991-1003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.