An improved IP formulation for the uncapacitated facility location problem: Capitalizing on objective function structure

In this paper we examine the Uncapacitated Facility Location Problem (UFLP) with a special structure of the objective function coefficients. For each customer the set of potential locations can be partitioned into subsets such that the objective function coefficients in each are identical. This structure exists in many applications, including the Maximum Cover Location Problem. For the problems possessing this structure, we develop a new integer programming formulation that has all the desirable properties of the standard formulation, but with substantially smaller dimensionality, leading to significant improvements in computational times. While our formulation applies to any instance of the UFLP, the reduction in dimensionality depends on the degree to which this special structure is present.