An effective heuristic for large-scale capacitated facility location problems

The Capacitated Facility Location Problem (CFLP) consists of locating a set of facilities with capacity constraints to satisfy the demands of a set of clients at the minimum cost. In this paper we propose a simple and effective heuristic for large-scale instances of CFLP. The heuristic is based on a Lagrangean relaxation which is used to select a subset of ‘promising’ variables forming the core problem and on a Branch-and-Cut algorithm that solves the core problem. Computational results on very large scale instances (up to 4 million variables) are reported.