The one-warehouse multi-retailer problem: reformulation, classification, and computational results

Solyali O., SÜRAL H.

ANNALS OF OPERATIONS RESEARCH, vol.196, no.1, pp.517-541, 2012 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 196 Issue: 1
  • Publication Date: 2012
  • Doi Number: 10.1007/s10479-011-1022-0
  • Journal Name: ANNALS OF OPERATIONS RESEARCH
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus
  • Page Numbers: pp.517-541
  • Keywords: One-warehouse multi-retailer problem, Lot sizing, Strong formulations, Integer programming, LOT-SIZING PROBLEM, MULTIITEM, ALGORITHM, MODEL, FORMULATIONS, SYSTEMS
  • Middle East Technical University Affiliated: Yes

Abstract

We consider the one-warehouse multi-retailer problem where a warehouse replenishes multiple retailers with deterministic dynamic demands over a horizon. The problem is to determine when and how much to order to the warehouse and retailers such that the total system-wide costs are minimized. We propose a new (combined transportation and shortest path based) integer programming reformulation for the problem in addition to the echelon stock and transportation based formulations in the literature. We analyze the strength of the LP relaxations of three formulations and show that the new formulation is stronger than others. We also show that the new and transportation based formulations are equivalent for the joint replenishment problem, where the warehouse is a crossdocking facility. We extend all formulations to the case with initial inventory at the warehouse and reveal the relation among their LP relaxations. We present our computational experiments with all formulations over a set of randomly generated test instances.