This paper studies a flow hub location problem (FHLP) stemming from recent trends in network design for e-commerce businesses. Specifically, e-commerce companies are flexible and agile in reoptimizing their logistics networks, including supplier (origin) and customer zone (destination) decisions. Furthermore, a large number of commodities (flows) and a relatively small sales volume for each product incentivize e-commerce retailers to lease warehouse spaces as hubs, yielding a large number of hub location candidates. As such, the proposed FHLP determines the origin and destination of each flow simultaneously with the hub location and flow routing decisions in contrast to the classical hub location problems, where the origins and destinations of all flows are predetermined. To solve this large-scale optimization problem, we propose an optimization algorithm that combines Lagrangian relaxation and Benders decomposition. Novel acceleration techniques, such as a clustering-empowered multicommodity Benders reformulation, learning-empowered elimination tests, and variable reduction techniques, are further developed to improve the performance and convergence of the algorithm. The efficiency of the proposed algorithm is evaluated via extensive computational experiments. The numerical results show that when compared with five other benchmark methods, the proposed algorithm can achieve optimal solutions faster for small-sized test instances and reduce optimality gaps for large-sized ones. For example, the proposed method achieves optimal solutions for a set of 10 test instances, with node sizes ranging from 225 to 450, within 20 minutes on average. In comparison, the automatic Benders decomposition method implemented in the commercial CPLEX solver achieves an average optimality gap of 2% within one hour. History: Accepted by Russell Bent, Area Editor for Network Optimization: Algorithms & Applications. Supplemental Material: The software that supports the findings of this study is available within the paper and its Supplemental Information ( https://pubsonline.informs.org/doi/suppl/10.1287/ijoc.2023.0367 ) as well as from the IJOC GitHub software repository ( https://github.com/INFORMSJoC/2023.0367 ). The complete IJOC Software and Data Repository is available at https://informsjoc.github.io/ .

We propose a general logic-based Benders decomposition (LBBD) for production planning problems with process configuration decisions. This family of problems appears in contexts where the machines are set up according to specific patterns, templates, or, in general, process configurations that allow for simultaneously producing products of different types. The problem requires determining feasible configurations for the machines and their corresponding production levels to fulfill the demand at the minimum total cost. The structure of this problem contains nonlinear constraints that link the number of units produced of each product with the used configurations and their production levels. We decompose the original problem into a master problem, where the configurations are determined, and a subproblem, where the production amounts are determined. This allows us to apply the LBBD technique to solve the problem using a standard LBBD implementation and a branch-and-check algorithm. LBBD enhancements through logic-based inequalities generated for subsets of products with common characteristics are proposed. Such inequalities represent a form of the subproblem relaxation added to the master problem during its resolution. In our computational experiments, we apply the proposed LBBD approaches to two different applications from the literature: cutting stock problems in the steel industry and a printing problem. Results show that the LBBD methods find optimal solutions much faster than the solution approaches in the literature and have a superior performance with respect to the number of instances solved to optimality and the solution quality. Summary of Contribution: In this work, we introduce a unified exact solution algorithm based on logic-based Benders decomposition to solve a class of integrated production planning problems that include process configuration decisions. We propose a general mathematical representation of the original integrated planning problem and logic-based Benders reformulations that can be applied to solve several problems within the studied class. Our implementation frameworks provide guidelines to practitioners in the field. The solution approaches in this paper together with the proposed methodological enhancements can be adapted to solve other integrated planning problems in a similar context, including the case when the original problem has a complex combinatorial and nonlinear structure.

Abstract This article introduces the consistent production routing problem in a setting with multiple plants and products. The problem consists in finding minimum‐cost production‐routing plans that also meet specific consistency requirements. In our context, consistency is defined as the degree to which some specified features of the solution remain invariant over time. We consider four forms of consistency, namely: driver, source, product, and plant consistency. For each of these consistency requirements, there is a target maximum value defining the decision‐maker's tolerance to deviations from a perfectly consistent solution. These targets are enforced as soft constraints whose violations need to be minimized when optimizing the integrated production and routing plan. We present a mathematical formulation for the problem and an exact branch‐and‐cut algorithm, enhanced with valid inequalities and specific branching priorities. We also propose a heuristic solution method based on iterated local search and several mathematical programming components. Experiments on a large benchmark set of newly introduced instances show that the enhancements substantially improve the performance of the exact algorithm and that the heuristic method performs robustly for production routing problems with different consistency requirements as well as for standard versions of the problem. We also analyze the cost‐consistency trade‐off of the solutions, confirming that it is possible to impose consistency without excessively increasing the cost. The results also reveal the impact of the first time period when optimizing and measuring the consistency features we study.

While the joint optimization of production and outbound distribution decisions in a manufacturing context have been intensively studied in the past decade, the integration of production, inventory, and inbound transportation from suppliers have received much less attention despite its practical relevance. This paper aims to fill the gap by introducing a general model for the assembly routing problem (ARP), which consists of simultaneously planning the assembly of a finished product at a plant and the routing of vehicles collecting materials from suppliers to meet the inventory requirements imposed by the production. We formulate the problem as a mixed-integer linear program and we propose a three-phase decomposition matheuristic that relies on the iterative solution of different subproblems. The first phase determines a setup schedule while the second phase optimizes production quantities, supplier visit schedules and shipment quantities. The third phase solves a vehicle routing problem for each period in the planning horizon. The algorithm is flexible, and we show how it can also be used to solve two well-known outbound distribution problems related to the ARP: the production routing problem and the inventory routing problem. Using the same parameter setting for all problems and instances, we obtain 781 new best-known solutions out of 2,628 standard IRP and PRP test instances. In particular, on large-scale multivehicle instances, the new algorithm outperforms specialized state-of-the-art heuristics for these two problems. The online appendix is available at https://doi.org/10.1287/ijoc.2018.0817 .

The coupled lot-sizing and cutting-stock problem has been a challenging and significant problem for industry, and has therefore received sustained research attention. The quality of the solution is a major determinant of cost performance in related production and inventory management systems, and therefore there is intense pressure to develop effective practical solutions. In the literature, a number of heuristics have been proposed for solving the problem. However, the heuristics are limited in obtaining high solution qualities. This paper proposes a new progressive selection algorithm that hybridizes heuristic search and extended reformulation into a single framework. The method has the advantage of generating a strong bound using the extended reformulation, which can provide good guidelines on partitioning and sampling in the heuristic search procedure to ensure an efficient solution process. We also analyze per-item and per-period Dantzig–Wolfe decompositions of the problem and present theoretical comparisons. The master problem of the per period Dantzig–Wolfe decomposition is often degenerate, which results in a tailing-off effect for column generation. We apply a hybridization of Lagrangian relaxation and stabilization techniques to improve the convergence. The discussion is followed by extensive computational tests, where we also perform detailed statistical analyses on various parameters. Comparisons with other methods indicate that our approach is computationally tractable and is able to obtain improved results. The online supplement is available at https://doi.org/10.1287/ijoc.2017.0746 .

We study the multi-item capacitated lot sizing problem with setup times. Based on two strong reformulations of the problem, we present a transformed reformulation and valid inequalities that speed up column generation and Lagrange relaxation. We demonstrate computationally how both ideas enhance the performance of our algorithm and show theoretically how they are related to dual space reduction techniques. We compare several solution methods and propose a new efficient hybrid scheme that combines column generation and Lagrange relaxation in a novel way. Computational experiments show that the proposed solution method for finding lower bounds is competitive with textbook approaches and state-of-the-art approaches found in the literature. Finally, we design a branch-and-price-based heuristic and report computational results. The heuristic scheme compares favorably or outperforms other approaches.

The inventory routing problem (IRP) and the production routing problem (PRP) are two difficult problems arising in the planning of integrated supply chains. These problems are solved in an attempt to jointly optimize production, inventory, distribution, and routing decisions. Although several studies have proposed exact algorithms to solve the single-vehicle problems, the multivehicle aspect is often neglected because of its complexity. We introduce multivehicle PRP and IRP formulations, with and without a vehicle index, to solve the problems under both the maximum level (ML) and order-up-to level (OU) inventory replenishment policies. The vehicle index formulations are further improved using symmetry breaking constraints; the nonvehicle index formulations are strengthened by several cuts. A heuristic based on an adaptive large neighborhood search technique is also developed to determine initial solutions, and branch-and-cut algorithms are proposed to solve the different formulations. The results show that the vehicle index formulations are superior in finding optimal solutions, whereas the nonvehicle index formulations are generally better at providing good lower bounds on larger instances. IRP and PRP instances with up to 35 customers, three periods, and three vehicles can be solved to optimality within two hours for the ML policy. By using parallel computing, the algorithms could solve the instances for the same policy with up to 45 and 50 customers, three periods, and three vehicles for the IRP and PRP, respectively. For the more difficult IRP (PRP) under the OU policy, the algorithms could handle instances with up to 30 customers, three (six) periods, and three vehicles on a single core machine, and up to 45 (35) customers, three (six) periods, and three vehicles on a multicore machine.

Production planning on multiple parallel machines is an interesting problem, both from a theoretical and practical point of view. The parallel machine lot-sizing problem consists of finding the optimal timing and level of production and the best allocation of products to machines. In this paper, we look at how to incorporate parallel machines in a mixed-integer programming model when using commercial optimization software. More specifically, we look at the issue of symmetry. When multiple identical machines are available, many alternative optimal solutions can be created by renumbering the machines. These alternative solutions lead to difficulties in the branch-and-bound algorithm. We propose new constraints to break this symmetry. We tested our approach on the parallel machine lot-sizing problem with setup costs and times, using a network reformulation for this problem. Computational tests indicate that several of the proposed symmetry-breaking constraints substantially improve the solution time, except when used for solving the very easy problems. The results highlight the importance of creative modeling in solving mixed-integer programming problems—specifically, the potential added value of symmetry-breaking constraints.