Developing a cost-effective integrated facility location model considering transportation and routing problems in a two-stage supply chain

In this paper, a new model is proposed to simultaneously consider the facility location problems, retailer assignment, inventory control and routing problem. In this model, the inventory control policy is first determined for retailers with a certain demand and then used as a constant reordering inventory time period for retailers that are located in a single route. The model is formulated as a mixed integer programming problem and, since it is an NP-Hard problem, a meta-heuristic algorithm based on simulated annealing is developed to solve the problem. A lower bound method is proposed for testing and analyzing the results obtained from the algorithm. A number of numerical test problems are solved, and the results for different cases of the problems show that the proposed algorithm is fast and efficient for solving the integrated problems of facility location, routing problem and inventory control in a two-stage supply chain with different dimensions.