A Heuristic Algorithm for the Capacitated Inventory Grouping Problem

Document Type

Article

Language

eng

Format of Original

23 p.

Publication Date

12-1996

Publisher

Wiley

Source Publication

Decision Sciences Journal of Innovative Education

Source ISSN

0011-7315

Abstract

This paper presents and solves a model for the multiple supplier inventory grouping problem, which involves the minimization of logistics costs for a firm that has multiple suppliers with capacity limitations. The costs included in the model are purchasing, transportation, ordering, and inventory holding, while the firm's objective is to determine the optimal flows and groups of commodities from each supplier. We present an algorithm, which combines subgradient optimization and a primal heuristic, to quickly solve the multiple supplier inventory grouping problem. Our algorithm is tested extensively on problems of various sizes and structures, and its performance is compared to that of OSL, a state-of-the-art integer programming code. The computational results indicate that our approach is extremely efficient for solving the multiple supplier inventory grouping problem.

Comments

Decision Sciences Journal of Innovative Education, Vol. 27, No. 4 (December 1996): 711-733. DOI.

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