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

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

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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: , , ,
Keywords: allocation: resources, demand, programming: dynamic
Abstract:

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.

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