Efficient Production-Distribution System Design

The production-distribution system design is an integral part of the general supply chain design. This paper proposes a novel solution methodology for this problem that is based on Lagrangean relaxation, interior-point methods, and branch and bound. Unlike classical approaches, Lagrangean relaxation is applied in a two-level hierarchy, branch and bound is based on a Lagrangean lower bound and column generation (branch and price), while interior-point methods are used within a cutting-plane context (analytic centre cutting-plane method---ACCPM). Numerical results demonstrate that the two-level approach outperforms the classical approach and provides a very sharp lower bound that is the (proven) optimal in most cases.production-distribution systems, Lagrangean relaxation, nested decomposition, interior-point cutting-plane methods, branch and price

A Multi-Exchange Heuristic for the Single Source Capacitated Facility Location Problem

We present a very large-scale neighborhood (VLSN) search algorithm for the capacitated facility location problem with single-source constraints. The neighborhood structures are induced by customer multiexchanges and by facility moves. We consider both traditional single-customer multi-exchanges, detected on a suitably defined customer improvement graph, and more innovative multicustomer multi-exchanges, detected on a facility improvement graph dynamically built through the use of a greedy scheme. Computational results for some benchmark instances are reported that demonstrate the effectiveness of the approach for solving large-scale problems. A further test on real data involving an Italian factory is also presented