Discrete location for bundled demand points

This paper considers a discrete location problem where the demand points are grouped. We propose a formulation, an enforcement for it, and an associated Lagrangian relaxation, and then we build feasible solutions to the problem from the optimal solutions to the relaxed subproblems. Valid inequalities for the formulation are also identified and added to the set of relaxed constraints. This method produces good feasible solutions and enables us to address large instances of the problem. Computational experiments have been performed with benchmark instances from the literature on related problems.