^ Springer. The Logic of Logistics. Theory, Algorithms, and Applications. for Logistics Management. David Simchi-Levi Xin Chen Julien Bramel
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1 David Simchi-Levi Xin Chen Julien Bramel The Logic of Logistics Theory, Algorithms, and Applications for Logistics Management Third Edition ^ Springer
2 Contents 1 Introduction What Is Logistics Management? Managing Cost and Uncertainty Examples Modeling Logistics Problems Logistics and Supply Chain in Practice Evaluation of Solution Techniques Additional Topics Book Overview 11 Part I Performance Analysis Techniques 13 2 Convexity and Super-modularity Convex Analysis Convex Sets and Convex Functions Continuity and Differentiability Properties Characterization of Convex Functions Convexity and Optimization Supermodularity Discrete Convex Analysis Z^-Convexity M^-Convexity Exercises 42 xi
3 xii Contents 3 Game Theory Noneooperative Game Theory Definition and Existence of Nash Equilibrium Uniqueness of Nash Equilibrium Cooperative Game Theory Core Nucleolus Shapley Value Exercises 63 4 Worst-Case Analysis Introduction The Bin-Packing Problem 6G First-Fit and Best-Fit First-Fit Decreasing and Best-Fit Decreasing The Traveling Salesman Problem A Minimum Spanning Tree-Based Heuristic The Nearest-Insertion Heuristic Christofides' Heuristic Local Search Heuristics Exercises 81 5 Average-Case Analysis Introduction The Bin-Packing Problem The Traveling Salesman Problem Exercises 96 6 Mathematical Programming-Based Bounds Introduction An Asymptotically Tight Linear Program Lagrangian Relaxation Lagrangian Relaxation and the Traveling Salesman Problem The 1-Tree Lower Bound The 1-Tree Lower Bound and Lagrangian Relaxation The Worst-Case Effectiveness of the 1-Tree Lower Bound Exercises 112 Part II Inventory Models Economic Lot Size Models with Constant Demands Introduction The Economic Lot Size Model 117
4 Contents xiii The Finite-Horizon Model Powcr-of-Two Policies Multi-Item Inventory Models Introduction Notation and Assumptions Worst-Case Analyses A Single-Warehouse Multiretailcr Model Introduction Model and Analysis Exercises Economic Lot Size Models with Varying Demands The Wagner-Whitin Model Models with Capacity Constraints Multi-Item Inventory Models Single-Item Models with Pricing Exercises Stochastic Inventory Models Introduction Single-Period Models The Model Finite-Horizon Models Model Description K-Convex Functions Main Results Quasiconvex Loss Functions Infinite-Horizon Models Models with Positive Lead Times Multi-Echelon Systems Exercises Integration of Inventory and Pricing Introduction Demand Models Single-Period Stochastic Models Finite-Horizon Models Model Description Symmetric A'-Convex Functions Additive Demand Functions General Demand Functions Special Case: Zero Fixed Ordering Cost Alternative Approach to the Optimality of (s, 5, p) Policies 10.6 Extensions and Challenges 200
5 xiv Contents 10.7 Risk-Averse Inventory Models Expected Utility Risk-Averse Models Exponential Utility Risk-Averse Models Exercises 207 Part III Competition, Coordination and Design Models Supply Chain Competition and Collaboration Models Inventory and Pricing Competition Inventory Centralization Games Model Inventory Games with a Linear Ordering Cost Inventory Games with Quantity Discounts Exercises Procurement Contracts Introduction Wholesale Price Contracts Buy-Back Contracts Revenue-Sharing Contracts Portfolio Contracts Exercises Process Flexibility Introduction Supermodularity and Incremental Benefits of Long Chains Supermodularity in Arc Capacities Incremental Benefits in Long Chains Characterizing the Performance of Long Chains Decomposition of a Long Chain Characterization and Optimality Computing the Performance of a Long Chain Performance of Long Chains Extensions Exercises Supply Chain Planning Models Introduction The Shipper Problem The Shipper Model A Set-Partitioning Approach Structural Properties 270
6 Contents xv Solution Procedure Computational Results Safety Stock Optimization Exercises Facility Location Models Introduction An Algorithm for the p-median Problem An Algorithm for the Single-Source Capacitated Facility Location Problem A Distribution System Design Problem The Structure of the Asymptotic Optimal Solution Exercises 297 Part IV Vehicle Routing Models The Capacitated VRP with Equal Demands Introduction Worst-Case Analysis of Heuristics The Asymptotic Optimal Solution Value Asymptotically Optimal Heuristics Exercises The Capacitated VRP with Unequal Demands Introduction Heuristics for the CVRP Worst-Case Analysis of Heuristics The Asymptotic Optimal Solution Value A Lower Bound An Upper Bound Probabilistic Analysis of Classical Heuristics A Lower Bound The UOP(a) Heuristic The Uniform Model The Location-Based Heuristic Rate of Convergence to the Asymptotic Value Exercises The VRP with Time-Window Constraints Introduction The Model The Asymptotic Optimal Solution Value An Asymptotically Optimal Heuristic The Location-Based Heuristic 349
7 xvi Contents A Solution Method for CVLPTW Implementation Numerical Study Exercises Solving the VRP Using a Column-Generation Approach Introduction Solving a Relaxation of the Set-Partitioning Formulation Solving the Set-Partitioning Problem Identifying Violated Clique Constraints Identifying Violated Odd Hole Constraints The Effectiveness of the Set-Partitioning Formulation Motivation Proof of Theorem Exercises 372 Part V Logistics Algorithms in Practice Network Planning Introduction Network Design Strategic Safety Stock Resource Allocation Summary Exercises A Case Study: School Bus Routing Introduction The Setting Literature Review The Problem in New York City Distance and Time Estimation The Routing Algorithm Additional Constraints and Features The Interactive Mode Data, Implementation, and Results 418 References 421 Index 441
1 Introduction 1. 2 Forecasting and Demand Modeling 5. 3 Deterministic Inventory Models Stochastic Inventory Models 63
CONTENTS IN BRIEF 1 Introduction 1 2 Forecasting and Demand Modeling 5 3 Deterministic Inventory Models 29 4 Stochastic Inventory Models 63 5 Multi Echelon Inventory Models 117 6 Dealing with Uncertainty
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