A constant approximation algorithm for the one-warehouse multi-retailer problem

Abstract

Deterministic inventory theory provides streamlined optimization models that attempt to capture tradeoffs in managing the flow of goods through a supply chain. We will consider a well-studied inventory model, called the one-warehouse multi-retailer problem (OWMR). and give the first approximation algorithm with constant performance guarantee; more specifically, we give a 2.398-approximation algorithm. Our results are based on an LP-rounding approach, and hence not only provide good algorithmic results, but show strong integrality gaps for these linear programs. Furthermore, we extend this result to obtain a constant performance guarantee for a capacitated variant of this model.