A location-inventory model including delivery delay cost and capacity constraints in a stochastic distribution network

Abstract

In this paper, we present a distribution network design problem in a supply chain system that minimises the total cost of location, inventory, and delivery delay. Customers' demands are random, and multiple capacity levels are available for the distribution centers. The problem is first formulated as a mixed integer convex programming model to optimally solve medium-sized instances, and then a heuristic is developed for solving large-sized instances.