The plant location problem with demand-dependent setup costs and centralized allocation

✍ Scribed by Igor Averbakh; Oded Berman; Zvi Drezner; George O. Wesolowsky

• Publisher: Elsevier Science
• Year: 1998
• Tongue: English
• Weight: 150 KB
• Volume: 111
• Category: Article
• ISSN: 0377-2217
• DOI: 10.1016/s0377-2217(97)00361-5

✦ Synopsis

Suppose that customers are situated at the nodes of a transportation network, and a service company plans to locate a number of facilities that will serve the customers. The objective is to minimize the sum of the total setup cost and the total transportation cost. The setup cost of a facility is demand-dependent, that is, it depends on the number of customers that are served by the facility. Centralized allocation of customers to facilities is assumed, that is, the service company makes a decision about allocation of customers to facilities. In the case of a general network, the model can be formulated as a mixed integer programming problem. For the case of a tree network, we develop a polynomial-time dynamic programming algorithm.