Article ID: | iaor2000670 |
Country: | Netherlands |
Volume: | 111 |
Issue: | 3 |
Start Page Number: | 543 |
End Page Number: | 554 |
Publication Date: | Dec 1998 |
Journal: | European Journal of Operational Research |
Authors: | Drezner Zvi, Wesolowsky George O., Berman Oded, Averbakh Igor |
Keywords: | allocation: resources, demand, programming: dynamic |
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.