Abstract: A class of joint location-inventory models for products with seasonal selling property is investigated in this paper. Based on the traditional uncapacitated fixed charge facility location problem, the working inventory cost and the safety stock cost in the distribution centers, as well as the impacts or scale of economy and risk pooling, are considered. Considering the uncertainty offuture demand with seasonal products, this paper treats the replenishment decisions as exogenous decision variables, and develops a joint location-inventory model aiming at the maximization of expected revenue. The proposed model extends the existed joint location-inventory models. As the proposed model is a mixed integer programming problem, a two-phrase solution procedure based on Lagarangian relaxation algorithm is developed to solve this problem. At last, four groups of numerical examples which are generated stochastically are given and the solution resups show that the proposed Lagrangian relaxation approach can solve the problem effectively.

Key words: facility location, location-inventory model, stochastic demand, Lagrangian relaxation