Uncertain location routing problem (LRP) integrated to inventory considering space limitation

Fifth Place winner of non-oral presentations at the 4th Annual Symposium on Graduate Research and Scholarly Projects (GRASP) held at the Hughes Metropolitan Complex, Wichita State University, April 25, 2008.Research completed at the Department of Industrial and Manufacturing Engineering, College of EngineeringAn optimal supply chain management system has a direct effect on the performance of any enterprise and could result in substantial cost savings. Successful supply chain management involves many decisions relating to the flow of the products. The decisions fall into three levels: strategic, tactical, and operational differentiated depending on the time horizon during which the decisions are made. Since decisions at these three levels are interdependent, optimizing at individual levels will lead to sub-optimal solution for the network. In this study, location as a strategic decision is combined with two tactical decisions: routing and inventory. First, location and routing decisions are combined to form location-routing problem (LRP). LRP can be defined as solving the following three sub- problems at the same time: locating one or more plants and warehouses among a set of potential plants and warehouses, assigning customers to selected depots, and determining routes from selected depots to assigned customers to minimize the cost of the supply network. Then, to make further improvements in the network, it is proposed to integrate an inventory model under the fixed interval order policy to the LRP. Since in the real world application, warehouses are limited by space capacity, a third logistic party copes with the space limitation if needed. Moreover, it is assumed that customers demand their multi- products requirement under stochastic condition. To solve such a model a heuristic solution is proposed