Exact algorithms for integrated facility location and production planning problems

We consider a class of facility location problems with a time dimension, which requires assigning every customer to a supply facility in each of a finite number of periods. Each facility must meet all assigned customer demand in every period at a minimum cost via its production and inventory decisio...

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Bibliographic Details
Published in:Naval research logistics Vol. 58; no. 5; pp. 419 - 436
Main Authors: Sharkey, Thomas C., Geunes, Joseph, Edwin Romeijn, H., Shen, Zuo-Jun Max
Format: Journal Article
Language:English
Published: Hoboken Wiley Subscription Services, Inc., A Wiley Company 01.08.2011
Wiley Subscription Services, Inc
Subjects:
Algorithms
branch and price
Decisions
Demand
facility location
Naval
order selection
Position (location)
Pricing
Production planning
Stockpiling
ISSN:0894-069X, 1520-6750, 1520-6750
Online Access:Get full text
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Summary:We consider a class of facility location problems with a time dimension, which requires assigning every customer to a supply facility in each of a finite number of periods. Each facility must meet all assigned customer demand in every period at a minimum cost via its production and inventory decisions. We provide exact branch‐and‐price algorithms for this class of problems and several important variants. The corresponding pricing problem takes the form of an interesting class of production planning and order selection problems. This problem class requires selecting a set of orders that maximizes profit, defined as the revenue from selected orders minus production‐planning‐related costs incurred in fulfilling the selected orders. We provide polynomial‐time dynamic programming algorithms for this class of pricing problems, as well as for generalizations thereof. Computational testing indicates the advantage of our branch‐and‐price algorithm over various approaches that use commercial software packages. These tests also highlight the significant cost savings possible from integrating location with production and inventory decisions and demonstrate that the problem is rather insensitive to forecast errors associated with the demand streams. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011
Bibliography:NSFC - No. 70731003; No. 90924012
ark:/67375/WNG-QP4CT114-X
National Science Foundation - No. CMMI-0927930; No. DMI-0355533; No. CMMI-0926508; No. CMMI-0621433; No. CMMI-0727640
ArticleID:NAV20458
National Science Foundation Graduate Research Fellowship
istex:968E18D68655F9C4ACC2199CED61E45929AFFFAB
ObjectType-Article-1
SourceType-Scholarly Journals-1
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ISSN:0894-069X
1520-6750
1520-6750
DOI:10.1002/nav.20458