Approximation Algorithms for Integrated Distribution Network Design Problems

  • Authors:

  • Yu Li;Jia Shu;Xi Wang;Naihua Xiu;Dachuan Xu;Jiawei Zhang

  • Affiliations:

  • Department of Mathematics, School of Science, Beijing Jiaotong University, Beijing 100044, P. R. China/ and China Association for Quality, Beijing 100032, P. R. China;Department of Management Science and Engineering, School of Economics and Management, Southeast University, Nanjing 210096, P. R. China;Department of Information, Operations, and Management Sciences, Stern School of Business, New York University, New York, New York 10012;Department of Mathematics, School of Science, Beijing Jiaotong University, Beijing 100044, P. R. China;Department of Applied Mathematics, Beijing University of Technology, Beijing 100124, P. R. China;Department of Information, Operations, and Management Sciences, Stern School of Business, New York University, New York, New York 10012

  • Venue:
  • INFORMS Journal on Computing
  • Year:
  • 2013

Quantified Score

Hi-index 0.00

Visualization

Abstract

In this paper, we study approximation algorithms for two supply chain network design problems, namely, the warehouse-retailer network design problem WRND and the stochastic transportation-inventory network design problem STIND. These two problems generalize the classical uncapacitated facility location problem by incorporating, respectively, the warehouse-retailer echelon inventory cost and the warehouse cycle inventory together with the safety stock costs. The WRND and the STIND were initially studied, respectively, by Teo and Shu Teo CP, Shu J 2004 Warehouse-retailer network design problem. Oper. Res. 523:396--408 and Shu et al. Shu J, Teo CP, Shen ZJM 2005 Stochastic transportation-inventory network design problem. Oper. Res. 531:48--60, where they are formulated as set-covering problems, and column-generation algorithms were used to solve their linear programming relaxations. Both problems can be regarded as special cases of the so-called facility location with submodular facility costs proposed by Svitkina and Tardos Svitkina Z, Tardos É 2010 Facility location with hierarchical facility costs. ACM Trans. Algorithms 62, Article No. 37, for which only a logarithmic-factor approximation algorithm is known. Our main contribution is to obtain efficient constant-factor approximation algorithms for the WRND and the STIND, which are capable of solving large-scale instances of these problems efficiently.