Large neighborhood local search for the p-median problem

In this paper we consider the well known p-median problem. We introduce a new large neighborhood based on ideas of S. Lin and B.W. Kernighan for the graph partition problem. We study the behavior of the local improvement and Ant Colony algorithms with new neighborhood. Computational experiments show that the local improvement algorithm with the neighborhood is fast and finds feasible solutions with small relative error. The Ant Colony algorithm with new neighborhood as a rule finds an optimal solution for computationally difficult test instances.