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Exact robust solutions for the combined facility location and network design problem in hazardous materials transportation

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  • Xufei Liu
  • Changhyun Kwon

Abstract

We consider a leader-follower game in the form of a bi-level optimization problem that simultaneously optimizes facility locations and network design in hazardous materials transportation. In the upper level, the leader intends to reduce the facility setup cost and the hazmat exposure risk, by choosing facility locations and road segments to close for hazmat transportation. When making such decisions, the leader anticipates the response of the followers who want to minimize the transportation costs. Considering uncertainty in the hazmat exposure and the hazmat transport demand, we consider a robust optimization approach with multiplicative uncertain parameters and polyhedral uncertainty sets. The resulting problem has a min-max problem in the upper level and a shortest-path problem in the lower level. We devise an exact algorithm that combines a cutting plane algorithm with Benders decomposition

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  • Xufei Liu & Changhyun Kwon, 2020. "Exact robust solutions for the combined facility location and network design problem in hazardous materials transportation," IISE Transactions, Taylor & Francis Journals, vol. 52(10), pages 1156-1172, October.
    • Handle: RePEc:taf:uiiexx:v:52:y:2020:i:10:p:1156-1172
    DOI: 10.1080/24725854.2019.1697017
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    Cited by:

    1. Beck, Yasmine & Ljubić, Ivana & Schmidt, Martin, 2023. "A survey on bilevel optimization under uncertainty," European Journal of Operational Research, Elsevier, vol. 311(2), pages 401-426.
    2. Corberán, Ángel & Landete, Mercedes & Peiró, Juanjo & Saldanha-da-Gama, Francisco, 2020. "The facility location problem with capacity transfers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    3. Rahman Khorramfar & Osman Y. Özaltın & Karl G. Kempf & Reha Uzsoy, 2022. "Managing Product Transitions: A Bilevel Programming Approach," INFORMS Journal on Computing, INFORMS, vol. 34(5), pages 2828-2844, September.

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