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Exceptional Paper--Location of Bank Accounts to Optimize Float: An Analytic Study of Exact and Approximate Algorithms

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Author Info

  • Gerard Cornuejols

    (CORE, University of Louvain, Belgium)

  • Marshall L. Fisher

    (University of Pennsylvania)

  • George L. Nemhauser

    (CORE, University of Louvain, Belgium)

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    Abstract

    The number of days required to clear a check drawn on a bank in city j depends on the city i in which the check is cashed. Thus, to maximize its available funds, a company that pays bills to numerous clients in various locations may find it advantageous to maintain accounts in several strategically located banks. We will discuss the problem of optimally locating bank accounts to maximize clearing times. The importance of this problem depends in part on its mathematical equivalence to the well-known uncapacitated plant location problem. We present a Lagrangian dual for obtaining an upper bound and heuristics for obtaining a lower bound on the value of an optimal solution. Our main results are analytical worst-case analyses of these bounds. In particular we show that the relative error of the dual bound and a "greedy" heuristic never exceeds [(K - 1)/K] k

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    File URL: http://dx.doi.org/10.1287/mnsc.23.8.789
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 23 (1977)
    Issue (Month): 8 (April)
    Pages: 789-810

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    Handle: RePEc:inm:ormnsc:v:23:y:1977:i:8:p:789-810

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    Cited by:
    1. Martínez-Salazar, Iris Abril & Molina, Julian & Ángel-Bello, Francisco & Gómez, Trinidad & Caballero, Rafael, 2014. "Solving a bi-objective Transportation Location Routing Problem by metaheuristic algorithms," European Journal of Operational Research, Elsevier, vol. 234(1), pages 25-36.
    2. Li, Xiaopeng & Ouyang, Yanfeng, 2011. "Reliable sensor deployment for network traffic surveillance," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 218-231, January.
    3. Mazzola, Joseph B. & Neebe, Alan W., 1999. "Lagrangian-relaxation-based solution procedures for a multiproduct capacitated facility location problem with choice of facility type," European Journal of Operational Research, Elsevier, vol. 115(2), pages 285-299, June.
    4. Sharma, R.R.K. & Berry, V., 2007. "Developing new formulations and relaxations of single stage capacitated warehouse location problem (SSCWLP): Empirical investigation for assessing relative strengths and computational effort," European Journal of Operational Research, Elsevier, vol. 177(2), pages 803-812, March.
    5. Naik, Ashich V. & Baveja, Alok & Batta, Rajan & Caulkins, Jonathan P., 1996. "Scheduling crackdowns on illicit drug markets," European Journal of Operational Research, Elsevier, vol. 88(2), pages 231-250, January.
    6. Klose, Andreas & Drexl, Andreas, 2005. "Facility location models for distribution system design," European Journal of Operational Research, Elsevier, vol. 162(1), pages 4-29, April.
    7. Mladenovic, Nenad & Brimberg, Jack & Hansen, Pierre & Moreno-Perez, Jose A., 2007. "The p-median problem: A survey of metaheuristic approaches," European Journal of Operational Research, Elsevier, vol. 179(3), pages 927-939, June.
    8. Sridharan, R., 1995. "The capacitated plant location problem," European Journal of Operational Research, Elsevier, vol. 87(2), pages 203-213, December.
    9. Tuzun, Dilek & Burke, Laura I., 1999. "A two-phase tabu search approach to the location routing problem," European Journal of Operational Research, Elsevier, vol. 116(1), pages 87-99, July.
    10. Righini, Giovanni, 1995. "A double annealing algorithm for discrete location/allocation problems," European Journal of Operational Research, Elsevier, vol. 86(3), pages 452-468, November.

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