2006 Volume 19 Issue 2 Pages 69-77
We consider, in this paper, the capacitated multi-level facility location problem as a supply-chain network design. To cope with such large-scale and complicated problems, we have presented a practical method that divides first the original problem into two sub-problems, and then combine each result consistently. Each sub-problem, i.e., distribution side sub-problem and procurement one is solved likely by a hybrid method that employs meta-heuristic method like tabu search and graph algorithm for solving a transformed minimum cost flow problem in a hierarchical manner. Moreover, we have given a practical adjusting method for thus separately solved solutions associated with the Lagrangian relaxation. Through numerical experiments, we have confirmed that the proposed method can outperform a popular commercial software. On the average, the approximated rate of the obtained results was within 1.006 compared with the final solution from the commercial software.
