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Stochastic single-source capacitated facility location model with service level requirements

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  • Lin, C.K.Y.

Abstract

A stochastic version of single-source capacitated facility location problem is considered. A set of capacitated facilities is to be selected to provide service to demand points with stochastic demand at the minimal total cost. The facilities have service level requirements modeled by chance constraints. For Poisson demand, the problem is proved equivalent to a known solvable deterministic problem. For Normally distributed demand, it is equivalent to a deterministic mixed integer non-linear programming problem. A hybrid heuristic of Lagrangean relaxation with a single-customer-multi-exchange heuristic is embedded within a branch-and-bound framework to find upper and lower bounds for this problem. From test instances created from benchmark problems (10-20 facilities and 50 demand nodes) and real-life data on the deterministic problem, the gap between the bounds is within 6.5% with an average of 2.5%.

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  • Lin, C.K.Y., 2009. "Stochastic single-source capacitated facility location model with service level requirements," International Journal of Production Economics, Elsevier, vol. 117(2), pages 439-451, February.
    • Handle: RePEc:eee:proeco:v:117:y:2009:i:2:p:439-451
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    4. Li, Jinfeng & Chu, Feng & Prins, Christian & Zhu, Zhanguo, 2014. "Lower and upper bounds for a two-stage capacitated facility location problem with handling costs," European Journal of Operational Research, Elsevier, vol. 236(3), pages 957-967.
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    7. Kınay, Ömer Burak & Saldanha-da-Gama, Francisco & Kara, Bahar Y., 2019. "On multi-criteria chance-constrained capacitated single-source discrete facility location problems," Omega, Elsevier, vol. 83(C), pages 107-122.
    8. Mohammad Nezhad, Ali & Manzour, Hasan & Salhi, Said, 2013. "Lagrangian relaxation heuristics for the uncapacitated single-source multi-product facility location problem," International Journal of Production Economics, Elsevier, vol. 145(2), pages 713-723.
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    10. Kınay, Ömer Burak & Yetis Kara, Bahar & Saldanha-da-Gama, Francisco & Correia, Isabel, 2018. "Modeling the shelter site location problem using chance constraints: A case study for Istanbul," European Journal of Operational Research, Elsevier, vol. 270(1), pages 132-145.

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