Capacitated heuristic program for multi-activity, multi-facility system designs

Multi-activity, multi-facility design systems occur in a wide variety of industrial and service applications, e.g., regional health care centers with configurations of activities at each center, and multi-echelon inventory distribution systems. The problem in designing such systems is to determine from a candidate set of possible locations what facility locations should be open and what types of activities should be carried out at each of the open facilities. This article presents an efficient heuristic procedure for such a problem. The heuristic procedure described can be used to solve both the uncapacitated and the capacitated problems where capacity is expressed in terms of the number of activities which can be supported by the facilities. Extensive computational experience with the heuristic is presented. The performance of the heuristic is compared against optimal solutions and the results look very encouraging.