An integrated model of facility location and transportation network design

Network location models have been used extensively for siting public and private facilities. In this paper we investigate a model that simultaneously optimizes facility locations and the design of the underlying transportation network. Motivated by the simple observation that changing the network topology is often more cost-effective than adding facilities to improve service levels, the model has a number of applications in regional planning, distribution, energy management, and other areas. The model generalizes the classical simple plant location problem. We show how the model can be solved effectively. We then use the model to analyze two potential transportation planning scenarios. The fundamental question of resource allocation between facilities and links is investigated, and a detailed sensitivity analysis provides insight into the model's usefulness for aiding budgeting and planning decisions. We conclude by identifying promising research directions.