Solution method for delivery center location problem considering inventory cost and profit ratio

Hiroto Tanikawa, Tomoki Fukuba, Tetsuya Sato, Takayuki Shiina

Research output: Contribution to journalArticle

Abstract

Facility location and allocation decision problem LAPs (Location-Allocation Problems) aiming to minimize total expenses, such as transportation expenses, have been considered in conventional supply chain networks. Facility location and inventory decision problem PM-LIPs (Profit-Maximization Location-Inventory Problems), which aim to maximize profits, are also being studied. This study considers a case in which a customer's demand is sensitive to the price of the commodity, and presents the PM-LIPs of the distribution center, which considers inventory cost and profit ratio. It also verifies the efficiency of the solution through numerical experiments. In this paper the new efficient solution algorithm based on piecewise linear approximation is developed.

Original languageEnglish
Pages (from-to)457-482
Number of pages26
JournalICIC Express Letters
Volume14
Issue number5
DOIs
Publication statusPublished - 2020

Keywords

  • Mixed integer program-ming
  • Piecewise linear approximation
  • Profit-maximization location-inventory problems

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Computer Science(all)

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