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Plant location with minimum inventory

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Abstract

We present an integer programming model for plant location with inventory costs. The linear programming relaxation has been solved by Dantzig-Wolfe decomposition. In this case the subproblems reduce to the minimum cut problem. We have used subgradient optimization to accelerate the convergence of the D-W algorithm. We present our experience with problems arising in the design of a distribution network for computer spare parts. In most cases, from a fractional solution we were able to derive integer solutions within 4% of optimality.

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  1. IBM, Thomas J. Watson Research Center, P.O. Box 218, 10598, Yorktown Heights, NY, USA

    Francisco Barahona & David Jensen

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  1. Francisco Barahona
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  2. David Jensen
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Barahona, F., Jensen, D. Plant location with minimum inventory. Mathematical Programming 83, 101–111 (1998). https://doi.org/10.1007/BF02680552

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  • DOI: https://doi.org/10.1007/BF02680552

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