The maximum return-on-investment plant location problem with market share

The maximum return-on-investment plant location problem with market share

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Article ID: iaor2009861
Country: United Kingdom
Volume: 59
Issue: 3
Start Page Number: 399
End Page Number: 406
Publication Date: Mar 2008
Journal: Journal of the Operational Research Society
Authors: , , , ,
Keywords: heuristics, programming: fractional
Abstract:

This paper examines the plant location problem under the objective of maximizing return-on-investment. However, in place of the standard assumption that all demands must be satisfied, we impose a minimum acceptable level on market share. The model presented takes the form of a linear fractional mixed integer program. Based on properties of the model, a local search procedure is developed to solve the problem heuristically. Variable neighbourhood search and tabu search heuristics are also developed and tested. Thus, a useful extension of the simple plant location problem is examined, and heuristics are developed for the first time to solve realistic instances of this problem.

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