Coordinated Replenishments with Multiple Suppliers and Price Discounts

Document Type

Article

Language

eng

Format of Original

20 p.

Publication Date

1998

Publisher

Wiley

Source Publication

Naval Research Logistics

Source ISSN

0894-069X

Abstract

In this study we present an integer programming model for determining an optimal inbound consolidation strategy for a purchasing manager who receives items from several suppliers. The model considers multiple suppliers with limited capacity, transportation economies, and quantity discounts. We propose an integrated branch and bound procedure for solving the model. This procedure, applied to a Lagrangian dual at every node of the search tree, combines the subgradient method with a primal heuristic that interact to change the Lagrangian multipliers and tighten the upper and lower bounds. An enhancement to the branch and bound procedure is developed using surrogate constraints, which is found to be beneficial for solving large problems. We report computational results for a variety of problems, with as many as 70,200 variables and 3665 constraints. Computational testing indicates that our procedure is significantly faster than the general purpose integer programming code OSL. A regression analysis is performed to determine the most significant parameters of our model. © 1998 John Wiley & Sons, Inc. Naval Research Logistics 45: 579–598, 1998

Comments

Naval Research Logistics, Vol. 45, No. 6 (September 1998): 579–598 . 3.0.CO;2-#" >DOI.

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