Abstract
In this paper we pose the location-allocation problem (single stage) with shortages and inventory variables in a style similar to Sharma (1991) where the resulting 0-1 MILP is solved by Bender’s decomposition and the associated all real problem is solved by Dantzig-Wolfe decomposition where the sub problems are posed as min-cost-network flow problems. It offers computational advantages. Sharma (1991) only considered inventory costs and did not consider the shortage costs. This way the formulation presented in this paper is unique.