A multi-product capacitated inventory-location model with risk pooling

In this paper, a novel formulation for the capacitated warehouse inventory-location model with risk pooling for multiple products is proposed. A single plant ships different types of products to retailers via a network of warehouses. The locations and inventory policies of the warehouses are chosen so as to minimize the sum of fixed facility location, transportation, and inventory carrying costs. The warehouses retain safety stock so as to maintain appropriate service levels in the face of uncertain demand at the retailers for multiple products.