A greedy heuristic for a three-level multi-period single-sourcing problem

Romeijn, H. Edwin and Romero-Morales, Dolores (2002) A greedy heuristic for a three-level multi-period single-sourcing problem. In: Klose, Andreas, Speranza, M. Grazia and van Wassenhove, Luk N., (eds.) Quantitative Approaches to Distribution Logistics and Supply Chain Management (Lecture Notes in Economics and Mathematical Systems). Springer, pp. 191-214. ISBN 978-3540436904

Abstract

In this paper we consider a model for integrating transportation and inventory decisions in a three-level logistics network consisting of plants, warehouses, and retailers (or customers). Our model includes production and throughout capacity constraints, and minimizes production, holding, and tansportation costs in a dynamic environment. We show that the problem can be reformulated as a certain type of assignment problem with convex objective function. Based on this observation, we propose a greedy heuristic for the problem, and illustrate its behaviour on a class of randomly generated problem instances. These experiments suggest that the heuristic may be asymptotically feasible and optimal with probability one in the number of customers.

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