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A relax‐and‐price heuristic for the inventory‐location‐routing problem
Author(s) -
Guerrero W. J.,
Prodhon C.,
Velasco N.,
Amaya C. A.
Publication year - 2015
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/itor.12091
Subject(s) - column generation , mathematical optimization , lagrangian relaxation , heuristic , shortest path problem , computer science , routing (electronic design automation) , vehicle routing problem , time horizon , mathematics , graph , computer network , theoretical computer science
This paper considers the problem of designing a supply chain assuming routing decisions. The objective is to select a subset of depots to open from a set of candidates, the inventory policies for a two‐echelon system, and the set of routes to perform distribution from the upper echelon to the next by a homogeneous fleet of vehicles over a finite planning horizon considering deterministic demand. To solve the problem, a partition is proposed using a Dantzig–Wolfe formulation on the routing variables. A hybridization between column generation, Lagrangian relaxation, and local search is presented within a heuristic procedure. Results demonstrate the capability of the algorithm to compute high quality solutions and empirically estimate the improvement in the cost function of the proposed model at up to 9% compared to the sequential approach. Furthermore, the suggested pricing problem is a new variant of the shortest path problem with applications in urban transportation and telecommunications.