Solving large scale fixed charge network flow problems

This paper presents an approximation algorithm to solve large scale Fixed Charge Network Flow Problems (FCNFP). Fixed charge type of cost functions are Wed to model several problems of Supply Chain such as production planning and inventory management, transportation, plant location, and lot sizing. Our algorithm-uses the Dynamic Slope Scaling Procedure (DSSP) to generate an initial solution to the problem, and then three different Local Search approaches contribute to finding a suboptimal solution. Computational experience with bipartite and layered networks are reported. The results indicate that our approach is suitable for large scale problems.