Location-Inventory Problems

In this chapter, inventory and facility location decisions are intertwined. Different problems, models, and algorithms are discussed. The impact of risk pooling in optimal decisions is also considered. After introducing several base concepts related to the location-inventory problems, continuous review policies are analyzed separately for uncapacitated and capacitated facilities. A periodic-review model with extensions is also presented. Demand is the usual source of uncertainty, assumed to be represented by a random variable with some given distribution.