The warehouse-retailer network design game

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January 2015, 11(1): 291-305. doi: 10.3934/jimo.2015.11.291

The warehouse-retailer network design game

Gaidi Li ^1, , Jiating Shao ^2, , Dachuan Xu ^3, and Wen-Qing Xu ^2,

1.	Department of Applied Mathematics, Beijing University of Technology, 100 Pingleyuan, Chaoyang District, Beijing 100124
2.	Department of Applied Mathematics, Beijing University of Technology, Beijing 100124, China, China
3.	Department of Applied Mathematics, Beijing University of Technology, 100 Pingleyuan, Chaoyang District, Beijing, 100124

Received November 2012 Revised January 2014 Published May 2014

Abstract
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In this paper, we consider the warehouse-retailer network design game based on the warehouse-retailer network design problem (WRND) proposed by Teo and Shu (2004). By carefully defining the generalized distance function, we present a cost-sharing method for the warehouse-retailer network design game. We show that the proposed cost-sharing scheme is cross-monotonic, competitive, and $3$-approximate cost recovery.

Keywords: approximate cost recovery., cost-sharing method, Warehouse-retailer network design.

Mathematics Subject Classification: Primary: 90C59; Secondary: 90C1.

Citation: Gaidi Li, Jiating Shao, Dachuan Xu, Wen-Qing Xu. The warehouse-retailer network design game. Journal of Industrial & Management Optimization, 2015, 11 (1) : 291-305. doi: 10.3934/jimo.2015.11.291

References:

[1]	N. R. Devanur, M. Mihail and V. V. Vazirani, Strategyproof cost-sharing mechanisms for set cover and facility location games,, Proceedings of the 4th ACM conference on Electronic commerce, (2003), 108. doi: 10.1145/779928.779942. Google Scholar
[2]	L. Fleischer and S. Iwata, A push-relabel framework for submodular function minimization and applications to parametric optimization,, Discrete Applied Mathematics, 131* (2003), 311. doi: 10.1016/S0166-218X(02)00458-4. Google Scholar*
[3]	M. X. Goemans and M. Skutella, Cooperative facility location games,, Journal of Algorithms, 50 (2004), 194. doi: 10.1016/S0196-6774(03)00098-1. Google Scholar
[4]	M. Grötschel, L. Lovász and A. Schrijver, Geometric Algorithms and Combinatorial Optimization,, Springer-Verlag, (1988). doi: 10.1007/978-3-642-97881-4. Google Scholar
[5]	N. Immorlica, M. Mahdian and V. Mirrokni, Limitations of cross-monotonic cost-sharing schemes,, Proceedings of the Sixteenth Annual ACM-SIAM Symposium on Discrete Algorithms, (2005), 602. Google Scholar
[6]	S. Iwata, L. Fleischer and S. Fujishige, A combinatorial strongly polynomial algorithm for minimizing submodular functions,, Journal of the ACM, 48 (2001), 761. doi: 10.1145/502090.502096. Google Scholar
[7]	K. Jain and V. V. Vazirani, Applications of approximation algorithms to cooperative games,, Proceedings of the Thirty-Third Annual ACM Symposium on Theory of Computing, (2001), 364. doi: 10.1145/380752.380825. Google Scholar
[8]	G. Li, Y. Li, J. Shu and D. Xu, A cross-monotonic cost-sharing scheme for the concave facility location game,, Journal of Global Optimization, 56 (2013), 1325. doi: 10.1007/s10898-012-9852-0. Google Scholar
[9]	Y. Li, J. Shu, X. Wang, N. Xiu, D. Xu and J. Zhang, Approximation algorithms for integrated distribution network design problem,, INFORMS Journal on Computing, 25 (2013), 572. doi: 10.1287/ijoc.1120.0522. Google Scholar
[10]	W. Lim, J. Ou and C. Teo, Inventory cost effect of consolidating several one-warehouse multiretailer systems,, Operations Research, 51 (2003), 668. doi: 10.1287/opre.51.4.668.16092. Google Scholar
[11]	H. Moulin and S. Shenker, Strategyproof sharing of submodular costs: Budget balance versus efficiency,, Econom Theory, 18 (2001), 511. doi: 10.1007/PL00004200. Google Scholar
[12]	M. Pál and É. Tardos, Group strategyproof mechanisms via primal-dual algorithms,, Proceedings of FOCS, (2003), 584. Google Scholar
[13]	R. Roundy, $98%$ Effective integer-ratio lot-sizing for one warehouse multi-retailer systems,, Management science, 31 (1985), 1416. doi: 10.1287/mnsc.31.11.1416. Google Scholar
[14]	A. Schrijver, A combinatorial algorithm minimizing submodular functions in strongly polynomial time,, Journal of Combinatorial Theory, 80 (2000), 346. doi: 10.1006/jctb.2000.1989. Google Scholar
[15]	J. Shu, An efficient greedy heuristic for warehouse-retailer network design optimization,, Transportation Science, 44 (2010), 183. doi: 10.1287/trsc.1090.0302. Google Scholar
[16]	J. Shu, C. Teo and Z. Shen, Stochastic transportation-inventory network design problem,, Operations Research, 53 (2005), 48. doi: 10.1287/opre.1040.0140. Google Scholar
[17]	C. Teo and J. Shu, Warehouse-retailer network design problem,, Operations Research, 52 (2004), 396. doi: 10.1287/opre.1030.0096. Google Scholar
[18]	D. Xu and D. Du, The $k$-level facility location game,, Operation Research Letter, 34 (2006), 421. doi: 10.1016/j.orl.2005.06.002. Google Scholar
[19]	J. Zhang, Cost allocation for joint replenishment models,, Operations Research, 57 (2009), 146. doi: 10.1287/opre.1070.0491. Google Scholar

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References:

[1]	N. R. Devanur, M. Mihail and V. V. Vazirani, Strategyproof cost-sharing mechanisms for set cover and facility location games,, Proceedings of the 4th ACM conference on Electronic commerce, (2003), 108. doi: 10.1145/779928.779942. Google Scholar
[2]	L. Fleischer and S. Iwata, A push-relabel framework for submodular function minimization and applications to parametric optimization,, Discrete Applied Mathematics, 131* (2003), 311. doi: 10.1016/S0166-218X(02)00458-4. Google Scholar*
[3]	M. X. Goemans and M. Skutella, Cooperative facility location games,, Journal of Algorithms, 50 (2004), 194. doi: 10.1016/S0196-6774(03)00098-1. Google Scholar
[4]	M. Grötschel, L. Lovász and A. Schrijver, Geometric Algorithms and Combinatorial Optimization,, Springer-Verlag, (1988). doi: 10.1007/978-3-642-97881-4. Google Scholar
[5]	N. Immorlica, M. Mahdian and V. Mirrokni, Limitations of cross-monotonic cost-sharing schemes,, Proceedings of the Sixteenth Annual ACM-SIAM Symposium on Discrete Algorithms, (2005), 602. Google Scholar
[6]	S. Iwata, L. Fleischer and S. Fujishige, A combinatorial strongly polynomial algorithm for minimizing submodular functions,, Journal of the ACM, 48 (2001), 761. doi: 10.1145/502090.502096. Google Scholar
[7]	K. Jain and V. V. Vazirani, Applications of approximation algorithms to cooperative games,, Proceedings of the Thirty-Third Annual ACM Symposium on Theory of Computing, (2001), 364. doi: 10.1145/380752.380825. Google Scholar
[8]	G. Li, Y. Li, J. Shu and D. Xu, A cross-monotonic cost-sharing scheme for the concave facility location game,, Journal of Global Optimization, 56 (2013), 1325. doi: 10.1007/s10898-012-9852-0. Google Scholar
[9]	Y. Li, J. Shu, X. Wang, N. Xiu, D. Xu and J. Zhang, Approximation algorithms for integrated distribution network design problem,, INFORMS Journal on Computing, 25 (2013), 572. doi: 10.1287/ijoc.1120.0522. Google Scholar
[10]	W. Lim, J. Ou and C. Teo, Inventory cost effect of consolidating several one-warehouse multiretailer systems,, Operations Research, 51 (2003), 668. doi: 10.1287/opre.51.4.668.16092. Google Scholar
[11]	H. Moulin and S. Shenker, Strategyproof sharing of submodular costs: Budget balance versus efficiency,, Econom Theory, 18 (2001), 511. doi: 10.1007/PL00004200. Google Scholar
[12]	M. Pál and É. Tardos, Group strategyproof mechanisms via primal-dual algorithms,, Proceedings of FOCS, (2003), 584. Google Scholar
[13]	R. Roundy, $98%$ Effective integer-ratio lot-sizing for one warehouse multi-retailer systems,, Management science, 31 (1985), 1416. doi: 10.1287/mnsc.31.11.1416. Google Scholar
[14]	A. Schrijver, A combinatorial algorithm minimizing submodular functions in strongly polynomial time,, Journal of Combinatorial Theory, 80 (2000), 346. doi: 10.1006/jctb.2000.1989. Google Scholar
[15]	J. Shu, An efficient greedy heuristic for warehouse-retailer network design optimization,, Transportation Science, 44 (2010), 183. doi: 10.1287/trsc.1090.0302. Google Scholar
[16]	J. Shu, C. Teo and Z. Shen, Stochastic transportation-inventory network design problem,, Operations Research, 53 (2005), 48. doi: 10.1287/opre.1040.0140. Google Scholar
[17]	C. Teo and J. Shu, Warehouse-retailer network design problem,, Operations Research, 52 (2004), 396. doi: 10.1287/opre.1030.0096. Google Scholar
[18]	D. Xu and D. Du, The $k$-level facility location game,, Operation Research Letter, 34 (2006), 421. doi: 10.1016/j.orl.2005.06.002. Google Scholar
[19]	J. Zhang, Cost allocation for joint replenishment models,, Operations Research, 57 (2009), 146. doi: 10.1287/opre.1070.0491. Google Scholar

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