Joint Decision Problem for Inventory Control and Facility Location

A joint location/inventory problem involving a single supplier and multiple retailers and associated with each retailer is some variable demand is studied in the paper. A non-linear mixed integer model is presented to incorporate inventory control decisions into a typical facility location model considering the stochastic demand, which are used to solve the distribution network design problem. A simulated annealing algorithm is developed for the model. Numerical application denotes the optimization method operated rapidly and the result is rational, so it provides scientific guidance for the distribution network design problem.