Branch and peg algorithms for the simple plant location problem

The simple plant location problem is a well-suited problem in combinatorial optimization. It is one of deciding where to locate a set of plants so that a set of clients can be supplied by them at the minimum cost. This problem often appears as a subproblem in other combinatorial problems. Several branch and bound techniques have been developed to solve these problems. In this paper we present two techniques that enhance the performance of branch and bound algorithms. The new algorithms thus obtained are called branch and peg algorithms, where pegging refers to fixing values of variables at each subproblem in the branch and bound tree, and is distinct from variable fixing during the branching process. We present exhaustive computational experiments which show that the new algorithms generate less than 60% of the number of subproblems generated by branch and bound algorithms, and in certain cases require less than 10% of the execution times required by branch and bound algorithms.