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2011

Linear programming based decomposition methods for inventory distribution systems

8 years 7 months ago
Linear programming based decomposition methods for inventory distribution systems
We consider an inventory distribution system consisting of one warehouse and multiple retailers. The retailers face random demand and are supplied by the warehouse. The warehouse replenishes its stock from an external supplier. The objective is to minimize the total expected replenishment, holding and backlogging cost over a finite planning horizon. The problem can be formulated as a dynamic program, but this dynamic program is difficult to solve due to its high dimensional state variable. It has been observed in the earlier literature that if the warehouse is allowed to ship negative quantities to the retailers, then the problem decomposes by the locations. One way to exploit this observation is to relax the constraints that ensure the nonnegativity of the shipments to the retailers by associating Lagrange multipliers with them, which naturally raises the question of how to choose a good set of Lagrange multipliers. In this paper, we propose efficient methods that choose a good set ...
Sumit Kunnumkal, Huseyin Topaloglu
Added 14 May 2011
Updated 14 May 2011
Type Journal
Year 2011
Where EOR
Authors Sumit Kunnumkal, Huseyin Topaloglu
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