Article ID: | iaor1995564 |
Country: | United Kingdom |
Volume: | 21 |
Issue: | 5 |
Start Page Number: | 557 |
End Page Number: | 572 |
Publication Date: | May 1994 |
Journal: | Computers and Operations Research |
Authors: | Berman Oded, Ganz Zvi |
Keywords: | programming: linear, programming: integer, heuristics, facilities |
Consider the problem of determining capacity expansions within a service industry composed of a chain of existing and new facilities, e.g. restaurants, hotels and gas-stations. The desired solution is a schedule of capacity expansions, each consisting of size, location and timing, in order to maximize profit when only limited funds are available. This paper includes two models. The first is a linear programming model suitable for organizations which rent or lease their facilities. The second is a mixed integer programming model where a fixed cost is paid anytime capacity is expanded. For the linear programming model the authors show how to represent the problem as a generalized network with gains problem and, in a case of non-decreasing demands, as a linear multiple-choice knapsack problem. For the mixed integer programming model they develop a heuristic having complexity