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Facility location with uncertain demand and economies of scale

Authors: Peter Schütz, Leen Stougie, and Asgeir Tomasgard

Published in: Dagstuhl Seminar Proceedings, Volume 5031, Algorithms for Optimization with Incomplete Information (2005)

Abstract

This paper adresses facility location under uncertain demand. The problem is to determine the optimal location of facilities and allocation of uncertain customer demand to these facilities. The costs of operating the facilities are subject to economies of scale. The objective is to minimize the total expected costs. These costs can be split into two parts: firstly the costs of investing in a facility as well as maintaining and operating it with strictly diminishing average costs, and secondly linear transportation cost. We formulate the problem as a two-stage stochastic programming model and present a solution method based on Lagrangian Relaxation. We also show some computional results based on data from the Norwegian meat industry regarding the location of slaughterhouses.

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Peter Schütz, Leen Stougie, and Asgeir Tomasgard. Facility location with uncertain demand and economies of scale. In Algorithms for Optimization with Incomplete Information. Dagstuhl Seminar Proceedings, Volume 5031, pp. 1-11, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2005)

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@InProceedings{schutz_et_al:DagSemProc.05031.11,
  author =	{Sch\"{u}tz, Peter and Stougie, Leen and Tomasgard, Asgeir},
  title =	{{Facility location with uncertain demand and economies of scale}},
  booktitle =	{Algorithms for Optimization with Incomplete Information},
  pages =	{1--11},
  series =	{Dagstuhl Seminar Proceedings (DagSemProc)},
  ISSN =	{1862-4405},
  year =	{2005},
  volume =	{5031},
  editor =	{Susanne Albers and Rolf H. M\"{o}hring and Georg Ch. Pflug and R\"{u}diger Schultz},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/DagSemProc.05031.11},
  URN =		{urn:nbn:de:0030-drops-1114},
  doi =		{10.4230/DagSemProc.05031.11},
  annote =	{Keywords: facility location , stochastic , economies of scale}
}

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Facility location with uncertain demand and economies of scale

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