A decomposition approach for facility location and relocation problem with uncertain number of future facilities
In this paper, we discuss two challenges of long term facility location problem that occur simultaneously; future demand change and uncertain number of future facilities. We introduce a mathematical model that minimizes the initial and expected future weighted travel distance of customers. Our model allows relocation for the future instances by closing some of the facilities that were located initially and opening new ones, without exceeding a given budget. We present an integer programming formulation of the problem and develop a decomposition algorithm that can produce near optimal solutions in a fast manner. We compare the performance of our mathematical model against another method adapted from the literature and perform sensitivity analysis. We present numerical results that compare the performance of the proposed decomposition algorithm against the exact algorithm for the problem.
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- Current, John & Ratick, Samuel & ReVelle, Charles, 1998. "Dynamic facility location when the total number of facilities is uncertain: A decision analysis approach," European Journal of Operational Research, Elsevier, vol. 110(3), pages 597-609, November.
- Owen, Susan Hesse & Daskin, Mark S., 1998. "Strategic facility location: A review," European Journal of Operational Research, Elsevier, vol. 111(3), pages 423-447, December.
- George O. Wesolowsky & William G. Truscott, 1975. "The Multiperiod Location-Allocation Problem with Relocation of Facilities," Management Science, INFORMS, vol. 22(1), pages 57-65, September.
- Berman, Oded & Drezner, Zvi, 2008. "The p-median problem under uncertainty," European Journal of Operational Research, Elsevier, vol. 189(1), pages 19-30, August.
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