A Conic Integer Programming Approach to Location-Inventory Problems Articles uri icon

publication date

  • April 2012

start page

  • 366

end page

  • 381

issue

  • 2

volume

  • 60

International Standard Serial Number (ISSN)

  • 0030-364X

Electronic International Standard Serial Number (EISSN)

  • 1526-5463

abstract

  • We study several joint facility location and inventory management problems with stochastic retailer demand. In particular, we consider cases with uncapacitated facilities, capacitated facilities, correlated retailer demand, stochastic lead times, and multicommodities. We show how to formulate these problems as conic quadratic mixed-integer problems. Valid inequalities, including extended polymatroid and extended cover cuts, are added to strengthen the formulations and improve the computational results. Compared to the existing modeling and solution methods, the new conic integer programming approach not only provides a more general modeling framework but also leads to fast solution times in general.

subjects

  • Business
  • Economics

keywords

  • integrated supply chain; risk pooling; conic mixed-integer program; polymatroids; covers