Design of a Distribution Network Using Primal-Dual Decomposition

Abstract

Amethodtosolvethedesignofadistributionnetworkforbottleddrinkscompanyisintroduced.Thedistributionnetworkproposed includes three stages: manufacturing centers, consolidation centers using cross-docking, and distribution centers. The problem is formulated using a mixed-integer programming model in the deterministic and single period contexts. Because the problem considersseveralelementsineachstage,adirectsolutionisverycomplicated.Formedium-to-largeinstancestheproblemfallsinto large scale. Based on that, a primal-dual decomposition known as cross decomposition is proposed in this paper. This approach allows exploring simultaneously the primal and dual subproblems of the original problem. A comparison of the direct solution withamixed-integerlinealprogrammingsolverversusthecrossdecompositionisshownforseveralrandomlygeneratedinstances. Resultsshowthegoodperformanceofthemethodproposed.