A multiobjective evolutionary approach for integration of location-inventory and vendor selection decisions

In this research, we examined an integrated location-inventory and vendor selection problem, including conflicting objectives (e.g. efficiency and responsiveness). The goal here is the simultaneous determination of (i) the set of vendors the firm should work with; (ii) the number and the locations of distribution centers (DCs) or warehouses and also the assignment of retailers to DCs and (iii) how much each retailer should order from the selected vendors. The model is a challenging mixed integer on linear program for which we propose an efficient solution approach that relies on a hybrid multiobjective evolutionary algorithm to provide an efficient facility location portfolio, and permits a comprehensive tradeoff evaluation between the “quality” of the set of elite solutions and the time and memory required to produce them. Computational results demonstrating the performance of the proposed heuristic methods and the potential practical impact of integrated decision making for location-inventory and vendor selection decisions are reported.