Naval Research Logistics (NRL) > 57 > 1 > 58 - 70
A facility reliability problem: Formulation, properties, and algorithm
Source
Abstract
Having a robustly designed supply chain network is one of the most effective ways to hedge against network disruptions because contingency plans in the event of a disruption are often significantly limited. In this article, we study the facility reliability problem: how to design a reliable supply chain network in the presence of random facility disruptions with the option of hardening selected facilities. We consider a facility location problem incorporating two types of facilities, one that is unreliable and another that is reliable (which is not subject to disruption, but is more expensive). We formulate this as a mixed integer programming model and develop a Lagrangian Relaxation‐based solution algorithm. We derive structural properties of the problem and show that for some values of the disruption probability, the problem reduces to the classical uncapacitated fixed charge location problem. In addition, we show that the proposed solution algorithm is not only capable of solving large‐scale problems, but is also computationally effective. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2010
Identifiers
journal ISSN : | 0894-069X |
journal e-ISSN : | 1520-6750 |
DOI | 10.1002/nav.20385 |
Authors
Michael Lim
- Department of Business Administration, University of Illinois at Urbana–Champaign, Champaign, Illinois 61820
Mark S. Daskin
- Department of Industrial Engineering and Management Sciences, Northwestern University, Evanston, Illinois 60208
- Department of Managerial Economics and Decision Sciences, Northwestern University, Evanston, Illinois 60208
Achal Bassamboo
- Department of Managerial Economics and Decision Sciences, Northwestern University, Evanston, Illinois 60208
Sunil Chopra
- Department of Managerial Economics and Decision Sciences, Northwestern University, Evanston, Illinois 60208
- Department of Industrial Engineering and Management Sciences, Northwestern University, Evanston, Illinois 60208