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Abstract
Single Stage Capacitated Warehouse Location Problem (SSCWLP) has been attempted by few researchers in
the past. These are Geoffrion and Graves [1], Sharma [2], Sharma [3] and Sharma and Berry [4]. In this pa-
per we give a “vertical decomposition” approach to solve SSCWLP that uses Lagrangian relaxation. This
way SSCWLP is broken into two versions of capacitated plant location problem (the CPLP_L and CPLP_R)
by relaxing the flow balance constraints. For CPLP_R, we use well known Lagrangian relaxations given in
literature (Christofides and Beasley [5] and Nauss [6]); and adopt them suitably for solving CPLP_L. We
show theoretically in this paper that SSCWLP can be more efficiently solved by techniques of vertical de-
composition developed in this paper than the method available in literature (Sharma and Berry [4]). Encour-
aging computational study is reported in this paper.
Keywords: Single Stage Capacitated Warehouse Location Problem, Linear Programming Relaxation,
Lagrangian Relaxation, Vertical Decomposition
1. Introduction and Literature Review There are authors who have attempted for SSCWLP
and its variants, some of these are discussed here. Geof-
The problem considered in this work is referred to as frion and Graves [1] gave a Bender’s decomposition ap-
the single stage capacitated warehouse location problem proach to solve multi-commodity SSCWLP. Later Hindi
(SSCWLP), which arises when the distances between and Basta [8] address similar type of distribution design
plants and markets are large and it becomes necessary to problem with consideration of operating cost per unit of
route the supplies through warehouses (of limited ca- commodity at warehouse along with the fixed cost asso-
pacities). A set of points are given where warehouses of ciated with it. They used a branch and bound (B&B) al-
limited capacities can be located. Each of these points gorithm based on weak Linear Programming (LP) re-
has a known fixed cost associated with them. We are to laxation of the problem. Sharma [3] have attempted for a
choose a sufficient number of points where warehouses food distribution problem faced by Food Corporation of
can be located so that sum total of location – distribution India (FCI), which is closer to multistage uncapacitated
cost is minimized. warehouse location problem. Later a solution procedure
The study on the SSCWLP is motivated by its applica- based on Lagrangian relaxation was developed for this.
tion in many fields, especially in supply chains in which Klose [9] attempts for capacitated two-stage facility lo-
hierarchical structure exists. Melo et al. [7] has reviewed cation problem with single source constraints. The de-
different variants of multistage facility location problem veloped model is a single commodity version of distribu-
and classified the types of problems attempted in this field tion design given by Geoffrion and Graves [1]. They
on the basis of number of layers, number of location lay- give LP formulation, which is iteratively refined using
ers, number of commodities, nature of the planning ho- valid inequalities and facets, and feasible solutions are
rizon (single/multi period) and the type of data (determi- obtained using simple heuristics by the information from
nistic/stochastic). solving LP. In this way good lower and upper bounds are
developed. Tragantalerngsak et al. [10] addresses for two solve the original SSCWLP by using a Lagrangian re-
layer facility location problem, where second layer facil- laxation. We finally show that this results in a better ap-
ity has limited capacity and service of customers is done proach to solve SSCWLP (than the one given by Sharma
by only one facility in the second layer. Simultaneously, and Berry [4]).
second layer facility can be supplied by only one facility In Section 2 we give the formulation and different re-
in the first layer. A Lagrangian relaxation (LR) based laxations of SSCWLP. In Section 3 vertical decomposi-
B&B algorithm is given which is compared with LP tion approach is discussed. Section 4 gives the results of
based B&B and is shown to be efficient as it provide empirical investigation used to verify the theorems of
smaller sized tree and requires less CPU time. A realistic Section 3. In Section 5 we give the detailed procedure to
variant to the problem that measure customer satisfaction determine lower bounds and feasible solution with the
is attempted by Eskigun et al. [11] where an outbound use of these relaxations and the usage of the bounds ob-
supply chain network is designed considering operational tained in determination of exact solution to SSCWLP.
dynamics of lead times, etc. They provide a Lagrangian Section 6 provides computational results along with its
based heuristic, which gives good quality solutions. Me- analysis. We finally provide our conclusion on this ap-
lachrinoudis et al. [12] uses physical programming ap- proach in Section 7.
proach to reconfigure a warehouse network through
consolidation and elimination. Their model enables a 2. Formulation and Relaxations of SSCWLP
decision maker to consider multiple criteria (i.e., cost,
customer service, etc) and to express criteria preferences Here we give a mathematical formulation of SSCWLP
not in a traditional form of weights, but in ranges of dif- using the style of Sharma and Sharma (2000). In later
ferent degrees of desirability. Farahani and Asgari [13] section, different relaxations of SSCWLP are developed
investigate locating some warehouses in a real-world and discussed.
military logistics system. They use multiple objective
decision making techniques to determine the locations of 2.1. Index
warehouses. To assign each supported center to only one
of the located warehouses, a set partitioning model is i: Index for supply points (plants); i = 1, ···, I; I =
used. Melachrinoudis and Min [14] develop a mixedin- number of plants.
teger programming model to solve the warehouse redes- j: Index for warehouses; j = 1, ···, J; J = number
ign problem to phase-out underutilized warehouses of potential warehouse points.
without deteriorating customer services. They validate k: Index for markets; k = 1, ···, K; K = number of
the model by applying it to a real-world problem and by markets.
its sensitivity analyses. Keskin and Üster [15] attempted
for SSCWLP and gave a scatter search-based heuristic 2.2. Definition of Constants
approach for the problem.
It is to be noted that Geoffrion and Graves [1] and Dk : Demand for the commodity at ‘k’
Sharma [2] have attempted the warehouse location prob- dk : Demand at market ‘k’ as a fraction of the total
lem very interestingly; their formulations are completely market demand; Dk k Dk
different from each other. Formulation given by Sharma Si : Supply available at ‘i’
[2] has reduced number of variables. Sharma and Berry si : Supply available at point ‘i’ as a fraction of
[4] discuss in detail the differences in the approach to the total market demand; Si k Dk .
formulation of SSCWLP due to Geoffrion and Graves [1] fj : Fixed cost of locating a warehouse at ‘j’
and Sharma [2]. It is to be noted that the primal problem CAPj : Capacity of a warehouse at ‘j’
in the Bender’s decomposition used by Geoffrion and cap j : Capacity of warehouse at ‘j’, as a fraction of
Graves [1] and Sharma [2] has a min-cost-flow problem the total market demand; CAPj k Dk .
involving flow from plants to warehouse to markets. In cpwij : Cost of transporting k Dk quantity of goods
this paper, we present a method of “Vertical Decomposi- from ‘i’ to ‘j’.
tion” that breaks the original problem into two problems. cwm jk : Cost of transporting k Dk quantity of goods
One involving flow from plants to warehouse (CPLP_L), from ‘j’ to ‘k’.
two involving flow from warehouse to markets (CPLP_R).
Using this approach we use the theory developed for 2.3. Definition of Variables
capacitated plant location problem (CPLP) (Cornuejols,
Sridharan, & Thizy [16]) (by suitably extending it to adopt XPWij : Quantity shipped from ‘i’ to ‘j’.
to new version of CPLP (referred to as CPLP_L)) to XWM jk : Quantity shipped from ‘j’ to ‘k’.
xpwij : Quantity shipped from ‘i’ to ‘j’ as a fraction of fixed cost of locating warehouses. Constraint (2) and (5)
total market demand; xpwij XPWij k Dk are the supply constraint which ensures that the total
xwm jk : Quantity shipped from ‘j’ to ‘k’ as a fraction commodity shipped out from a supply point to all ware-
of total market demand; houses can at most be equal to the total supply from that
xwm jk XWM jk k Dk . supply point. Constraint (2a) and (5a) ensures the total
quantity received at any market to be equal to the de-
yj : Location variable (= 1 if warehouse is located mand at that market. Constraint (3) and (3a) link 0-1 in-
at point ‘j’, 0 otherwise) teger variables ( y j ) and other distribution variables that
are real and greater than zero. These ensure that if a
2.4. Mathematical Formulation warehouse is located at any point then quantities shipped
in or out of that warehouse point are positive, else the
Minimize quantities shipped will be zero, as the warehouse is not
Z cpwij xpwij cwm jk xwm jk f j y j (1) located. Constraint (4) and (4a) ensures that total quan-
i j j k j tity flown in and out of the warehouse does not exceed
Subject to: its capacity if it’s located. We assume i s j 1 to
xpwij 1 (2) ensure feasibility of the problem.
i j Non-negativity constraint on xpwij and xwm jk are
given by (7) and (7a); while (8) is the 0-1 integer con-
xwm jk 1 (2a)
straint on y j . (11) is the flow balance constraint which
j k
ensures that total incoming quantity at a particular ware-
xpwij y j si i, j (3) house from all plants is equal to total outgoing quantity
from the same warehouse to all the markets. (9) is a sur-
xwm jk y j d k j , k (3a)
rogate constraint. With so many constraints available, we
can formulate SSCWLP in a variety of different ways. In
xpwij y j cap j j (4)
these if (8) is replaced by (12) we obtain various LP re-
i
laxations. In addition, various relaxations can be ob-
xwm jk y j cap j j (4a) tained as Lagrangian relaxation (LR).
k
cap j y j 1
R1_O: (1); Subject to: (2)-(6), (2a)-(6a), (9) and (10).
(8)
j Result 1: R1_O is equal to strong LP relaxation of
SSCWLP given by Sharma and Berry (2007). Here re-
xpwij xwm jk j (9) striction on y j is relaxed by (10).
i k
Proof: It is easy to see.
Just to emphasize that in the above formulation instead R2_O: In this LR a constraint introducing upper ( PU )
of using single letter names of variable and constant, we and lower ( PL ) limits on the number of open plants is
use multiple letter names (viz. xpw, xwm, cpw, cwm, etc) added up. i.e.
so that one can easily recall their meanings, that is, n
flow/cost between plant to warehouse (pw) or warehouse PL y j PU (11)
to market (wm) etc, while reading the paper. j 1
First part of the objective function denotes the total This LR is obtained by dualizing (2), (2a), (5) and (5a).
cost of transporting the commodity from supply points to Let xpw0 , xwm0 be the Lagrangian multipliers as-
the warehouses. The second part is the transportation sociated with (2), (2a) and xpwi , xwmk with (5) and
cost from warehouses to markets; and the last part is the (5a) respectively.
ZR2 _ O max min cpwij xpw0 xpwi xpwij cwm jk xwm0 xwmk xwm jk
xpw0 , xwm0 , xpw, xwm xpw, xwm , y i
j j k
(12)
f j y j xpwi si xwmk d k xpw0 xwm0
j i k
Hence objective (12); Subject to: (3), (3a), (4), (4a), SSCWLP formulation amenable to vertical decomposi-
(6), (6a), (7), (9) and (11). tion approach. We use _ flow j as the Lagrangian
R3_O: This is a LR obtained by dualizing (2), (2a), (6) multipliers to dualize (11). The resulting formulation of
and (6a). Hence objective is (14); Subject to: (3), (3a), CPLP_L, CPLP_R and SSCWLP, with (9) relaxed, are
(4), (4a), (6), (6a), (7), (8), (9). as shown below:
R4_O: (1); Subject to: (2)-(6), (2a)-(6a), (7,8) and (9). CPLP_L:
Z CPLP _ L min cpwij _ flow j xpwij
The original problem SSCWLP is referred for com-
parison. xpw , y
i j
(1a)
1
3. Vertical Decomposition Approach for f j yj
SSCWLP 2 j
Subject to: (2), (3), (4), (5), (6), (7), (8) and (9).
SSCWLP is a well known NP hard problem. Hence, in CPLP_R:
order to solve large sized and realistic instances of
SSCWLP, we devise a decomposition procedure—called Z CPLP _ R min cwm jk _ flow j xwm jk
xwm , y
j k
“vertical decomposition approach”, which is described (1b)
1
below. f j yj
2 j
The objective function (1) may be rewritten as:
Minimize Z f1 f 2 , where Subject to: (2a), (3a), (4a), (5a), (6a), (7), and (8).
f1 xpwij , cpwij , y j , f j SSCWLP:
1 Z SSCWLP max min cpwij _ flow j xpwij
min cpwij xpwij f j yj _ flow xpw, xwm , y i
j
i j 2 j
f 2 xwm jk , cwm jk , y j , f j cwm jk _ flow j xwm jk f j y j
j k j
1
min cwm jk xwm jk f j yj or,
Z SSCWLP max Z CPLP _ L Z CPLP _ R
j k 2 j
(1c)
_ flow
This restructured objective function becomes a moti-
vation to introduce the vertical decomposition approach Subject to: (2) to (9) and (2a) to (6a).
for solving SSCWLP. If we give a close look to the for- Here the problem SSCWLP is broken into sub problems
mulation of SSCWLP, it can be observed that (9) is the CPLP_L and CPLP_R. This is vertical decomposition.
only constraint which involves both the flow variables - Sharma [2] decomposed a multi commodity and multi
xpw and xwm. So, if (9) is relaxed, the problem decom- period problem into single commodity and single period
poses into two versions of CPLP, each with one part (f1 problem representing flow from plants to warehouses to
or f2) of the objective function shown above. We name markets. This is referred to as horizontal decomposition
this approach as vertical decomposition approach, be- to bring out the contrast. In the next sub-section different
cause the full SSCWLP is decomposed into two parts – relaxations of CPLP_L and CPLP_R are discussed in
left and right. The left part, CPLP_L, contains the vari- detail. Further, procedure to solve SSCWLP using these
ables and parameters of plants and warehouse only (xpw decomposed problems is discussed. Later a relationship
and y). Similarly, the right part, CPLP_R, contains the theorem indicating the strength of different relaxations of
variables and parameters of warehouse and markets only SSCWLP is given.
(xwm and y). Therefore, in a sense, by vertical decompo-
sition approach, the stages of the problem are decom- 3.1. Relaxations of CPLP_L
posed to get smaller sized problems, which are relatively
easier to solve. R1_L: (1a); Subject to: (2)-(6) and (10).
Now, (9) has to be relaxed in order to make the R2_L: In this LR is obtained by dualizing (2) and (6).
Subject to: (3), (4), (6), (7) and (11). 3.2. Relaxations of CPLP_R
R3_L: (13); Subject to: (3), (4), (6)-(9).
R4_L: (1a); Subject to: (2), (3), (4), (5), (6), (7) and R1_R: (1b); Subject to: (2a)-(6a) and (10). R1_R is a
(8). strong LP relaxation (follows from Davis and Ray (1969)).
The main problem i.e. ZCPLP_L is referred as R4_L for R2_R: LR proposed by Christofides and Beasley [5].
comparison. This LR is obtained by dualizing (2a) and (6a).
Subject to: (3a), (4a), (6a), (7), (1). 3.4. Relationship between Relaxations of CPLP_R
R3_R: (14); Subject to: (3a), (4a), (6a), (7), (8). It is
attempted by Nauss [6]. Cornuejols, Sridharan, & Thizy [16] have given relative
R4_R: (1b); Subject to: (2a), (3a), (4a), (5a), (6a), (7), strength of different relaxations of standard CPLP which
and (8). is similar to CPLP_R. Hence, the same relaxations along
The main problem i.e. ZCPLP_R is referred as R4_R for with their relative strength are used for CPLP_R here in
comparison. form of theorem 2 below.
Theorem 2: Z R1_ R Z R 2 _ R Z R 3 _ R Z R 4 _ R .
3.3. Relationship between Relaxations of This theorem provides the relative effectiveness of the
CPLP_L bounds that may be obtain for these relaxations of CPLP_R.
Note that CPLP_L is different from CPLP_R. In this 3.5. Relationship between Relaxations of
section, a comparison of the strength of the bounds given SSCWLP
by different relaxations of CPLP_L is given. We con-
structed the proofs and found that they are marginally Here a comparison of the strength of the bounds, given
different from CPLP_R (Cornuejols, Sridharan, & Thizy by different relaxations of SSCWLP based on CPLP_L
[16]. and CPLP_R is given.
Theorem 1: Z R1_ L Z R 2 _ L Z R 3 _ L Z R 4 _ L . Proposition 1: The bounds obtained by relaxations
This theorem provides the relative effectiveness of the R1_O and R2_O are related as Z R1_ O Z R 2 _ O .
bounds that may be obtained for these relaxations of Proof: With the flow balance constraint (9) relaxed,
CPLP_L. objective of R2_O can be written as:
ZR2 _ O max
xpw0 , xpw,
min
xpw , xwm , y
cpwij _ flow j xpw0 xpwi xpwij
i j
xwm0 , xwm , _ flow
cwm jk _ flow j xwm0 xwmk xwm jk f j y j xpwi si xwmk d k xpw0 xwm0
j k j i k
Subject to: (4), (4a), (6), (6a), (7). According to the proofs earlier shown, Z R1_ R Z R 2 _ R
[for CPLP_R] and Z R1_ L Z R 2 _ L [for CPLP_L].
Z R 2 _ O max Z R 2 _ L Z R 2 _ R Hence, Z R 2 _ O max Z R1_ L Z R1_ R .
_ flow j
_ flow
Note that here (9) is excluded. If (9) is also included, problem instance, we obtained the value of different re-
then the problem become R1_O subjected to its usual laxations of CPLP_R and CPLP_L using GAMS 22.3 in
constraints. i.e. Z R1_ O Z R 2 _ O . a Pentium D 2.80 GHz, 1 GB RAM computer. Sub-gra-
Proposition 2: Z R 2 _ O Z R 3 _ O . dient optimization is used for solving Lagrangian relaxa-
Proof: We find that all the results of original problem tions of CPLP_L and CPLP_R. Lagrangian relaxation
have identical proof. Hence proof for Proposition 1 has method is powerful in the sense that it gives good lower
been shown and the proofs for Proposition 2 being simi- bounds (for the minimization problem) in competitive
lar to it are omitted. When these propositions are com- computational time. Starting Lagrangian multiplier is
bined, following theorem is developed showing relative taken either to be 0 or maximum value of 0.5* cap j f j
strength of bounds given by different relaxations of from all j warehouses. Using trial and error approach
SSCWLP. between these two choices, good results were obtained.
Theorem 3: Z R1_O Z R 2_O Z R 3_O Z R 4_O . Details can be seen in appendix A. Here we take per-
Strongest LP relaxation of SSCWLP proposed by centage improvement between a pair of relaxations (to
Sharma and Berry [4] is same as relaxation R1_O of generate normalized data) for every problem instance;
SSCWLP proposed. From theorem 3, we observe that the and then t-test is performed.
lagrangian relaxations R2_O and R3_O can be better t-tests for bounds of the different relaxations for dif-
than the strongest relaxations known of SSCWLP (that is ferent categories are shown in Tables 2 and 3. These
R1_O). Empirical study given below shows that differ- t-values are compared with those in Table 4.
ences in performances of relaxations considered in theo- Note that each cell of the above table shows the t-value
rem 3 are statistically significant. of the t-test between the two relaxations represented by
the respective row/column of the matrix. For e.g. t-value
4. Empirical Investigation for CPLP_L and between R1 and R2 shows the t-test done between 0 and
CPLP_R 100*(R2-R1)/R1. Table 2 shows the t-values obtained
for differences in bounds of relaxations for category A
Here we give results of an empirical study. We find that problems; and Table 3 is revealing the t-values for dif-
there is significant difference in the performance of dif- ferences in bounds of relaxations for category B prob-
ferent relaxations considered in theorem 3. lems.
Sample problems for SSCWLP sized 50 × 50 × 50
were randomly created using C codes; a 50 × 50 × 50 4.1. Analysis for Category A Problems
problem corresponds to a set of 50 plants, 50 warehouses
and 50 markets. Two categories of problems are consid- When comparing t values for bounds of different relaxa-
ered—nil category (A) and abundance category (B); the tions of CPLP_L [Table 2], the LP relaxation R1_L is
same is tabulated in Table 1 below. giving significantly better bounds as compared to rest all
For each of these categories, we created 25 problems relaxations. We observe from Table 2 that linear relaxa-
in which fixed location cost and the transportation cost tion R1_R is the best performing relaxation for category
are uniformly distributed as shown in Table 1. For each A problems.
Parameters
Problem category Fixed location cost Transportation Cost
s i
i cap
j
j
CPLP_L CPLP_R
t-test t-test
R1 R2 R3 R4 R1 R2 R3 R4
R3 23.35+ R3 24.71+
CPLP_L CPLP_R
t-test t-test
R1 R2 R3 R4 R1 R2 R3 R4
R3 1.63 R3 3.18+
Table 4. t-critical value (Table value). Then Stop. Optimal Solution Found
Else pick up top node (TN) from list A
Significance level α = 0.05 α = 0.01 α = 0.005
Step 3: Compute lagrangian bound (associated with
t-critical (one tail) 1.68 2.40 2.68 R2_O or R3_O) or LP relaxation bound (associated with
+++ ++
: At α = 0.05, significance level = 1 tail; : At α = 0.01, significance R1_O) associated with node TN (referred to as TN.R_
level = 1 tail; +: At α = 0.005, significance level = 1 tail. Bound). If (TN_R_Bound > best_lower_bound), then
best_lower_bound = TN_R_Bound.
4.2. Analysis for Category B Problems Solve associated min cost flow problem (with TN) and
generate a feasible solution for SSCWLP (referred as
When comparing t-values from Table 3 and Table 4, it TN_feasible_solution). If (TN_feasible_solution < cur-
is found that most of the relaxations are following theo- rent_best_solution), then current_best_solution = TN_
rem-1 and theorem-2 respectively for CPLP_L as well as feasible_solution.
CPLP_R. Significant t-values indicate that the LR R3_L If (TN.R_Bound > current_best _solution)
of CPLP_L and R3_R of CPLP_R are providing signifi- Then node TN gets fathomed. Go to step 2.
cantly better bounds. This results in faster execution of Else If free variables associated with TN >= 1
the branch and bound procedure based procedure to Then generate two more nodes by setting a chosen free
solve SSCWLP as shown in the next section. variable associated with TN at 0 and 1; make relevant
updates and add these nodes to list A.
5. Branch and Bound Procedure to Solve Else No more branching possible; go to step 2.
SSCWLP The above procedure is repeated separately for R1_O,
R2_O and R3_O to facilitate a comparison. Empirical
In this section we aim to use three best performing re- investigation is given below.
laxations to determine bounds in a branch and bound
procedure. It is known that stronger the relaxations, bet- 6. Empirical Investigation for SSCWLP
ter the bounds, lesser will be the nodes traversed in an
enumeration tree and hence one achieves computational In the earlier sections, the relationship theorem indicat-
advantage. In R2_O and R3_O we relax the flow balance ing the strength of different relaxations of CPLP_L,
constraints and solve the associated CPLP_R and CPLP_R and SSCWLP is shown. Also solution proce-
CPLP_L by lagrangian relaxation procedure. Details of dures of some of the best performing relaxations of
lagrangian relaxation procedure is given in Sharma SSCWLP using vertical decomposition approach are
(1991). The sketch of branch and bound procedure to discussed. In this section we focus on usage of these re-
solve SSCWLP is given below. laxations of SSCWLP in a branch and bound procedure
to obtain an optimal solution. Performance of these re-
5.1. Procedure Branch and Bound laxations with its application in a branch and bound is
compared with a standard branch and bound procedure
Step 1: Initialization. Set current_best _solution = INFIN- (BB) using strong LP relaxation (R1_O) of SSCWLP as
ITY; its lower bound. We thus compare the new proposed
best_lower_bound = - INFINITY; relaxations with that of the best possible known relaxa-
Node [1]. Fixed Var List = {y1 = 0}; tion, R1_O (Sharma and Berry, 2007), and show its effi-
Node [1]. Free Var List = {2, ···, N}; cacy by the reduction on nodes and time achieved. The
Node [2]. Fixed Var List = {y1 = 1}; objective of this section is to study how well these re-
Node [2]. Free Var List = {2, ···, N}; laxations do relative to each other. In particular, we are
Add nodes 1 and 2 to list A. interested in looking at the influence of supplies versus
Step 2: If list A is empty capacities, capacities versus demands, and fixed costs
versus transportations costs on the bounds provided by the time required to solve them; these are shown in Table
these relaxations, and the solutions provided by the heu- 6.
ristics. For each Rm-Rn (“m” and “n” are BB, 1, 2, 3 as shown
Sample problems for SSCWLP, sized 50 × 50 × 50 and in column 3 of Table 6), “Nodes” is “t” calculated for the
100 × 100 × 100 (plants × warehouse × markets) were difference between (Number of nodes taken with formu-
created randomly. From the empirical investigations done lation Rm/Number of nodes taken with formulation Rn)
for CPLP_L and CPLP_R, we have observed that rela- and 1. Similarly, “Time” is “t” calculated for difference
tionship theorems 1 and 2 are satisfied for the abundance between CPU time for Rm/CPU time for Rn) and 1. BB
case more promptly. Hence for conducting empirical refers to the complete enumeration for solving the prob-
experiments for complete problem of SSCWLP we have lem. Nodes under BB refer to the number of nodes taken
considered varying categories of abundance in supply and to solve the problem. Negative t value indicates reduced
capacity limits. Four categories of problems with varying number of node and reduced execution time.
problem size and supply – capacity limits were prepared
details of which are given in Table 5. 6.1. Analysis for Category P1 and P3 Problems
We solved 20 problem instances in each of the category
of P1, P2, P3 and P4 on Pentium D 2.80 GHz, 1 GB RAM Category P1 and P3 problems have got the same variation
computer. All the algorithms are coded in MATLAB in supply and capacity limits, but their problem sizes are
software with calls to GAMS22.3 for solving the min- different. For the problem category P1, we note from the
cost-flow problem. Details are given in appendix B. We Table 6 that the performance (in terms of reduction in
compute percentage improvement for any two methods number of nodes) of relaxation R1_O is significantly
for every problem instance (to generate normalized data) better than BB. Similarly R2_O is significantly better
and then t-tests are performed on the number of nodes and performer as compared to R1_O; however performance of
Parameters
Problem category Problem Size Fixed Location Cost Transportation Cost
s
i
i cap
j
j
Table 6. t-test for Nodes and time taken to solve the problems.
R3_O is still better than R2_O. Also higher t values in- category for smaller sized problems, the use of R1_O,
dicate that superiority of R1_O over BB is most signifi- R2_O or R3_O is equally better option compared to the
cant and R3_O over R2_O is least (however it is still branch and bound method because both R2_O and R3_O
significant). Exactly similar is the behavior of perform- perform same as R1_O. However for large sized problems
ance in terms of time taken to solve the problems. That is of this category, with the use of relaxations R1_O, R2_O
R3_O is the best performer, superior to R2_O, which is and R3_O (in ascending order of better performance) as
better than R1_O; BB is the worst performer in terms of bounds in the branch and bound method perform better
time. than the usual branch and bound technique.
Now when the problem size increases, that is for the We have shown that lagrangian based branch and bound
problem category P3, it can be observed that R3_O still procedures (R2_O and R3_O) are superior to R1_O
remains the best performer in terms of reduction in (Sharma and Berry [4]) by implementing these algorithms
number of nodes as well as time taken to solve a problem. on the common platform of MATLAB. It may be noted
The relaxations R2_O and R1_O (in that sequence) follow that BB and R1_O are solvable by commercially available
R3_O; however BB still remains the worst performer, packages as LINGO, CPLEX or GAMS; whereas la-
both in terms of nodes as well as solution time. Also as grangian relaxation based procedures (R2_O and R3_O)
can be observed from the t values, the superior perform- are not directly solvable by these commercially available
ance of R2_O over R1_O is most significant; the pairs packages. First author of this paper (a Ph D candidate then)
“R1_O over BB” and “R3_O over R2_O” follows in that coded these algorithms on MATLAB; and there is enor-
sequence. mous scope for improvement before its performance be
So it can be inferred from here that the use of relaxation compared to commercially available packages like CPLEX.
R3_O is most suited to solve small as well as large sized However it is to be noted that Sharma and Berry [4]
SSCWLP, when there is a moderate level (2.5 times) of showed that R1_o is significantly superior to plain branch
over-supply and over-capacity. Solving SSCWLP of and bound procedure (BB) compared on commercially
category P1 and P3 using Branch and Bound is the least available LINGO software. Thus we provide preliminary
efficient method; however the use of R1_O, R2_O and evidence that R2_O and R3_O have significant merit for
R3_O (in ascending order of better performance) to de- solving SSCWLP.
termine bounds in a Branch and Bound method proves to
be very fruitful. 7. Conclusions
6.2. Analysis for Category P2 and P4 problems The contribution of this work in the existing vast literature
of location problems is two folds. First is the introduc-
Category P2 and P4 problems have got the same variation tion of “vertical decomposition” approach for SSCWLP,
in supply and capacity limits, but their problem size is which can easily be extended to the multi stage ware-
different. It can be observed from the Table 6 that for house location problems, or to the problems of different
problem category P2, relaxation R1_O performs signifi- domains that are modeled in a manner similar to
cantly better, both in terms of reduction in number of SSCWLP. Vertical decomposition approach allows us to
nodes traversed as well as solution time, than the usual decompose the complex and large sized SSCWLP into
branch and bound method (BB). However, there is not any two versions of the standard CPLP. One of the decom-
significant improvement in the performance of “R2_O posed problems, CPLP_R, is well researched and has
over R1_O” or “R3_O over R2_O”. different known relaxations. For the other problem,
However when the problem size increases, that is for CPLP_L, we provide different relaxation and show that
problem category P4, R1_O performs better than BB, some of them are similar to CPLP_R. A relationship
R2_O performs better than R1_O, and R3_O performs theorem of different relaxations shows the superiority of
significantly better than R2_O both in terms of reduction some relaxations over the others. In particular we show
in number of nodes as well as reduction in the time re- theoretically that for SSCWLP better Lagrangian relaxa-
quired to solve a problem. Also observing the t values, it is tion exists than the LP relaxation given by Sharma and
evident that the significant performance of R1_O over BB Berry [4]. Computational studies give support to our
is not as noteworthy as the significance of “R2_O over theoretical propositions.
R1_O” or “R3_O over R2_O”. Second and the major contribution of this work is to
So it can be inferred that when level of over-supply and show the efficacy of “vertical decomposition” approach,
over-capacity is high (10 times), it is better to solve a by using the best performing relaxations of the decom-
smaller sized SSCWLP using R1_O (or R2_O or R3_O) posed and original SSCWLP to advantageously deter-
and a large sized SSCWLP using R3_O. Also in this mine an exact solution to the large sized SSCWLP.
Three best performing relaxations are selected based on tated Facility Location Problem,” Journal of Operational
their relative efficiencies given in relationship theorems, Research Society, Vol. 29, No. 12, 1978, pp. 1195-1201.
and a procedure to solve them is also provided. These [7] M. T. Melo, S. Nickel and F. Saldanha-da-Gama, “Facil-
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bound method. Computational study is done for a variety
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Appendix A
Computational results for LHSCPLP, category A problem 50 × 50 × 50.
Appendix B
Computational results for category P1 problems 50 × 50 × 50. (time in seconds).
BB R1 R2 R3
S.No Optimal
Nodes Time Nodes Time Nodes Time Nodes Time
BB R1 R2 R3
S.No Optimal
Nodes Time Nodes Time Nodes Time Nodes Time
BB R1 R2 R3
S.No Optimal
Nodes Time Nodes Time Nodes Time Nodes Time
BB R1 R2 R3
S.No Optimal
Nodes Time Nodes Time Nodes Time Nodes Time