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.
|Title of host publication||Quantitative Approaches to Distribution Logistics and Supply Chain Management|
|Editors||Andreas Klose, M. Gracia Speranza, Luke N. Van Wassenhove|
|Place of Publication||Berlin|
|Publication status||Published - 2002|
|Series||Lecture Notes in Economics and Mathematical Systems|
Romeijn, H. E., & Romero Morales, D. (2002). A Greedy Heuristic for a Three-level Multi-period Single-sourcing Problem. In A. Klose, M. G. Speranza, & L. N. V. Wassenhove (Eds.), Quantitative Approaches to Distribution Logistics and Supply Chain Management (pp. 191-214). Berlin: Springer. Lecture Notes in Economics and Mathematical Systems, Vol.. 519