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A Greedy Heuristic for a Three-Level Multi-Period Single-Sourcing Problem

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  • Romeijn, H.E.
  • Romero Morales, D.

Abstract

In this paper we consider a model for integrating transportation and inventory decisions in a three-level logistics network consisting of plants, warehouses, and retailers (or customers). Our model includes production and throughout capacity constraints, and minimizes production, holding, and tansportation costs in a dynamic environment. We show that the problem can be reformulated as a certain type of assignment problem with convex objective function. Based on this observation, we propose a greedy heuristic for the problem, and illustrate its behaviour on a class of randomly generated problem instances. These experiments suggest that the heuristic may be asymptotically feasible and optimal with probability one in the number of customers.

Suggested Citation

  • Romeijn, H.E. & Romero Morales, D., 2000. "A Greedy Heuristic for a Three-Level Multi-Period Single-Sourcing Problem," ERIM Report Series Research in Management ERS-2000-04-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:13
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    References listed on IDEAS

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    1. Freling, R. & Romeijn, H.E. & Romero Morales, D. & Wagelmans, A.P.M., 1999. "A branch and price algorithm for the multi-period single-sourcing problem," Econometric Institute Research Papers EI 9941-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. A Klose, 1999. "An LP-based heuristic for two-stage capacitated facility location problems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 50(2), pages 157-166, February.
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    5. Duran, F., 1987. "A large mixed integer production and distribution program," European Journal of Operational Research, Elsevier, vol. 28(2), pages 207-217, February.
    6. Richard Freling & H. Edwin Romeijn & Dolores Romero Morales & Albert P.M. Wagelmans, 1999. "A Branch and Price Algorithm for the Multi-Period Single-Sourcing Problem," Tinbergen Institute Discussion Papers 99-092/4, Tinbergen Institute.
    7. A. M. Geoffrion & G. W. Graves, 1974. "Multicommodity Distribution System Design by Benders Decomposition," Management Science, INFORMS, vol. 20(5), pages 822-844, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    dynamic demand pattern; dynamic models; heuristic solution approaches; inventory costs; transportation costs;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

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