An integrated model for logistics network design |
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Authors: | Jean-François Cordeau Federico Pasin Marius M Solomon |
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Institution: | 1. HEC Montréal, 3000, Chemin de la C?te-Sainte-Catherine Montréal, Montréal, Canada, H3T 2A7 2. Northeastern University, 360 Huntington Avenue, Boston, MA, 02115, USA
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Abstract: | In this paper we introduce a new formulation of the logistics network design problem encountered in deterministic, single-country,
single-period contexts. Our formulation is flexible and integrates location and capacity choices for plants and warehouses
with supplier and transportation mode selection, product range assignment and product flows. We next describe two approaches
for solving the problem---a simplex-based branch-and-bound and a Benders decomposition approach. We then propose valid inequalities
to strengthen the LP relaxation of the model and improve both algorithms. The computational experiments we conducted on realistic
randomly generated data sets show that Benders decomposition is somewhat more advantageous on the more difficult problems.
They also highlight the considerable performance improvement that the valid inequalities produce in both solution methods.
Furthermore, when these constraints are incorporated in the Benders decomposition algorithm, this offers outstanding reoptimization
capabilities. |
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Keywords: | Logistics Network design Benders decomposition |
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