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Linear location-inventory models for service parts logistics network design
Affiliation:1. Department of Management Sciences, University of Waterloo, Waterloo, Ontario, Canada;2. Frontline Systems, Inc., Incline Village, NV, USA;3. School of Management, Sabanci University, Istanbul, Turkey;1. Department Industrial Engineering and Business Information Systems, Faculty of Behavioural, Management and Social Sciences, University of Twente, P.O. Box 217, AE Enschede, 7500, the Netherlands;2. Systems Engineering Department, College of Computer Science & Engineering, King Fahd University of Petroleum & Minerals, Dhahran, 31261, Saudi Arabia;3. School of Industrial Engineering, Eindhoven University of Technology, 5600 MB, Eindhoven, the Netherlands;4. The Wharton School, University of Pennsylvania, Philadelphia, PA 19104, USA;1. Industrial Engineering Department, Naval Academy, National Defense University, Istanbul 34940, Turkey;2. Industrial Engineering Department, Bahcesehir University, Istanbul 34353, Turkey;3. Sabanci Business School, Sabanci University, Istanbul 34956, Turkey;1. Research Center on Modern Logistics, Graduate School at Shenzhen, Tsinghua University, Shenzhen 518055, China;2. Department of Industrial Engineering, Tsinghua University, Beijing 100084, China;1. Laboratoire d’Optimisation des Systèmes Industriels, Institut Charles Delaunay, UMR CNRS 6281, Université de Technologie de Troyes, 10004 Troyes Cedex, France;2. School of Economics and Management, Xi’an University of Technology, Xi’an 710072, PR China;1. Eindhoven University of Technology, Department of Industrial Engineering and Innovation Sciences, Eindhoven, the Netherlands;2. ASML Netherlands B.V., Veldhoven, the Netherlands
Abstract:We present two integrated network design and inventory control problems in service-parts logistics systems. Such models are complicated due to demand uncertainty and highly nonlinear time-based service level constraints. Exploiting unique properties of the nonlinear constraints, we provide an equivalent linear formulation under part-warehouse service requirements, and an approximate linear formulation under part service requirements. Computational results indicate the superiority of our approach over existing approaches in the literature.
Keywords:Service-parts logistics  Logistics network design  Facility location  Inventory management  Time-based service requirements
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