Optimizing pricing and location decisions for competitive service facilities charging uniform price

In this paper, we present the problem of optimizing the location and pricing for a set of new service facilities entering a competitive marketplace. We assume that the new facilities must charge the same (uniform) price and the objective is to optimize the overall profit for the new facilities. Demand for service is assumed to be concentrated at discrete demand points (customer markets); customers in each market patronize the facility providing the highest utility. Customer demand function is assumed to be elastic; the demand is affected by the price, facility attractiveness, and the travel cost for the highest-utility facility. We provide both structural and algorithmic results, as well as some managerial insights for this problem. We show that the optimal price can be selected from a certain finite set of values that can be computed in advance; this fact is used to develop an efficient mathematical programming formulation for our model.     

Local search algorithm for universal facility location problem with linear penalties

The universal facility location problem generalizes several classical facility location problems, such as the uncapacitated facility location problem and the capacitated location problem (both hard and soft capacities). In the universal facility location problem, we are given a set of demand points and a set of facilities. We wish to assign the demands to facilities such that the total service as well as facility cost is minimized. The service cost is proportional to the distance that each unit of the demand has to travel to its assigned facility. The open cost of facility i depends on the amount z of demand assigned to i and is given by a cost function \(f_i(z)\). In this work, we extend the universal facility location problem to include linear penalties, where we pay certain penalty cost whenever we refuse serving some demand points. As our main contribution, we present a (\(7.88+\epsilon \))-approximation local search algorithm for this problem.     

Location and allocation for distribution systems with transshipments and transportion economies of scale

Locating transshipment facilities and allocating origins and destinations to transshipment facilities are important decisions for many distribution and logistic systems. Models that treat demand as a continuous density over the service region often assume certain facility locations or a certain allocation of demand. It may be assumed that facility locations lie on a rectangular grid or that demand is allocated to the nearest facility or allocated such that each facility serves an equal amount of demand. These assumptions result in suboptimal distribution systems. This paper compares the transportation cost for suboptimal location and allocation schemes to the optimal cost to determine if suboptimal location and allocation schemes can produce nearly optimal transportation costs. Analytical results for distribution to a continuous demand show that nearly optimal costs can be achieved with suboptimal locations. An example of distribution to discrete demand points indicates the difficulties in applying these results to discrete demand problems.     

鲁棒动态设施选址问题的近似算法

设施选址问题是组合优化中重要问题之一。动态设施选址问题是传统设施选址问题的推广,其中度量空间中设施的开设费用和顾客的需求均随着时间的变化而变化。更多地,经典设施选址问题假设所有的顾客都需要被服务。在这个模型假设下,所有的顾客都需要服务。但事实上,有时为服务距离较远的顾客,需要单独开设设施,导致了资源的浪费。因此,在模型设置中,可以允许一些固定数目的顾客不被服务 (带异常点的设施选址问题),此外也可以通过支付一些顾客的惩罚费用以达到不服务的目的 (带惩罚的设施选址问题)。本文将综合以上两种鲁棒设置考虑同时带有异常点和惩罚的动态设施选址问题,通过原始-对偶框架得到近似比为3的近似算法。     

A single facility stochastic location problem undera-distance

In this paper we consider a stochastic facility location model in which the weights of demand points are not deterministic but independent random variables, and the distance between the facility and each demand point isA-distance. Our objective is to find a solution which minimizes the total cost criterion subject to a chance constraint on cost restriction. We show a solution method which solves the problem in polynomial order computational time. Finally the case of rectilinear distance, which is used in many facility location models, is discussed.     

带惩罚的动态设施选址问题的近似算法

本文研究带惩罚的动态设施选址问题,在该问题中假设不同时段内设施的开放费用、用户的需求及连接费用可以不相同,而且允许用户的需求不被满足,但是要有惩罚.对此问题我们给出了第-个近似比为1.8526的原始对偶(组合)算法.     

An analytical approach to the facility location and capacity acquisition problem under demand uncertainty

This article presents an analysis of facility location and capacity acquisition under demand uncertainty. A novel methodology is proposed, in which the focus is shifted from the precise representation of facility locations to the market areas they serve. This is an extension of the optimal market area approach in which market area size and facility capacity are determined to minimize the total cost associated with fixed facility opening, variable capacity acquisition, transportation, and shortage. The problem has two variants depending on whether the firm satisfies shortages by outsourcing or shortages become lost sales. The analytical approach simplifies the problem considerably and leads to intuitive and insightful models. Among several other results, it is shown that fewer facilities are set up under lost sales than under outsourcing. It is also shown that the total cost in both models is relatively insensitive to small deviations in optimal capacity choices and parameter estimations.     

A discrete competitive facility location model with variable attractiveness

We consider the discrete version of the competitive facility location problem in which new facilities have to be located by a new market entrant firm to compete against already existing facilities that may belong to one or more competitors. The demand is assumed to be aggregated at certain points in the plane and the new facilities can be located at predetermined candidate sites. We employ Huff's gravity-based rule in modelling the behaviour of the customers where the probability that customers at a demand point patronize a certain facility is proportional to the facility attractiveness and inversely proportional to the distance between the facility site and demand point. The objective of the firm is to determine the locations of the new facilities and their attractiveness levels so as to maximize the profit, which is calculated as the revenue from the customers less the fixed cost of opening the facilities and variable cost of setting their attractiveness levels. We formulate a mixed-integer nonlinear programming model for this problem and propose three methods for its solution: a Lagrangean heuristic, a branch-and-bound method with Lagrangean relaxation, and another branch-and-bound method with nonlinear programming relaxation. Computational results obtained on a set of randomly generated instances show that the last method outperforms the others in terms of accuracy and efficiency and can provide an optimal solution in a reasonable amount of time.     

一类多商品设施选址问题的基于线性松弛解的启发式方法

多商品设施选址问题是众多设施选址问题中一类重要而困难的问题.在这一问题中,顾客的需求可能包含不止一种商品.对于大规模问题,成熟的商业求解器往往不能在满意的时间内找到高质量的可行解.研究了无容量限制的单货源多商品设施选址问题的一般形式,并给出了应用于此类问题的两个启发式方法.这两个方法基于原选址问题的线性规划松弛问题的最优解,分别通过求解紧问题和邻域搜索的方式给出了原问题的一个可行上界.理论分析指出所提方法可以实施于任意可行问题的实例.数值结果表明所提方法可以显著地提高求解器求解此类设施选址问题的求解效率.     

考虑需求不确定的多级应急物流设施选址研究

为了对急物流设施选址问题进行合理的研究,建立了包含配送中心、配送点和需求点的多级应急物流网络。基于应急物资需求特点,使用三角模糊数表示应急物资需求的不确定性,同时考虑应急救援成本和应急救援时间两个目标,建立了应急物流设施选址模型。采用去模糊化方法将三角模糊数转化为确定数,利用成本和时间的单目标的最优结果将多目标转化为相对值,再对时间和成本目标进行加权处理,既消除了不同目标之间的单位及数量级差异,还可以进行动态调整。设计了遗传算法对模型进行求解,通过实际算例表明了模型和算法可以有效地解决应急物流设施选址问题。     

需求导向的容量设施竞争选址问题研究

客户意愿与容量限制是竞争设施选址问题中两个重要的影响因素,在考虑客户意愿与设施容量共同作用条件下,建立了最小化企业总成本以及每个客户费用为目标的竞争设施选址问题优化模型,通过设计需求导向服务分配机制解决设施与客户之间服务关系分配问题,结合模拟退火思想提出了求解模型的算法。最后利用数值例子分析了需求导向服务分配机制以及目标权重、预算限额等参数对于选址决策的影响,其中考虑需求导向因素会适当增加企业的总成本,但可以减少客户所付出的费用从而增强对客户的吸引力;另外企业的预算限额对于企业的设施选址决策有着重要的影响,企业所能获取的市场份额与其选址预算限额呈正相关的关系;而客户所需付出的总费用与企业提供服务的总成本两者之间则呈负相关的关系,因此需要通过服务质量与成本之间的权衡实现最理想的选址决策。     

The Quintile Share Ratio in location analysis

The inequality measure “Quintile Share Ratio” (QSR or sometimes S80/S20) is the primary income inequality measure in the European Union’s set of indicators on social cohesion. An important reason for its adoption as a leading indicator is its simplicity. The Quintile Share Ratio is “The ratio of total income received by the 20% of the population with the highest income (top quintile) to that received by the 20% of the population with the lowest income (lowest quintile)”. The QSR concept is used in this paper in the context of obnoxious facility location where the inequality is in distances to the obnoxious facility. The single facility location problem minimizing the QSR is investigated. The problem is investigated for continuous uniform demand in an area such as a disk, a rectangle, and a line; when demand is generated at a finite set of demand points; and when the facility can be located anywhere on a network. Optimal solution algorithms are devised for demand originating at a finite set of demand points and at nodes of the network. Computational experiments demonstrate the effectiveness of the algorithms.     

Designing multi-echelon service parts networks with finite repair capacity

We propose an approach to model and solve the joint problem of facility location, inventory allocation and capacity investment in a two echelon, single-item, service parts supply chain with stochastic demand. The objective of the decision problem is to minimize the total expected costs associated with (1) opening repair facilities, (2) assigning each field service location to an opened facility, (3) determining capacity levels of the opened repair facilities, and (4) optimizing inventory allocation among the locations. Due to the size of the problem, computational efficiency is essential. The accuracy of the approximations and effectiveness of the approach are analyzed with two numerical studies. The approach provides optimal results in 90% of scenarios tested and was within 2% of optimal when it did not.We explore the impact of capacity utilization, inventory availability, and lead times on the performance of the approach. We show that including tactical considerations jointly with strategic network design resulted in additional cost savings from 3% to 12%. Our contribution is the development of a practical model and approach to support the decision making process of joint facility location and multi-echelon inventory optimization.     

The single facility location problem with time-dependent weights and relocation cost over a continuous time horizon

In this study, we investigate the problem of locating a facility in continuous space when the weight of each existing facility is a known linear function of time. The location of the new facility can be changed once over a continuous finite time horizon. Rectilinear distance and time- and location-dependent relocation costs are considered. The objective is to determine the optimal relocation time and locations of the new facility before and after relocation to minimize the total location and relocation costs. We also propose an exact algorithm to solve the problem in a polynomial time according to our computational results.     

Efficient heuristics for the rectilinear distance capacitated multi-facility Weber problem

In this paper, we consider the capacitated multi-facility Weber problem with rectilinear distance. This problem is concerned with locating m capacitated facilities in the Euclidean plane to satisfy the demand of n customers with the minimum total transportation cost. The demand and location of each customer are known a priori and the transportation cost between customers and facilities is proportional to the rectilinear distance separating them. We first give a new mixed integer linear programming formulation of the problem by making use of a well-known necessary condition for the optimal facility locations. We then propose new heuristic solution methods based on this formulation. Computational results on benchmark instances indicate that the new methods can provide very good solutions within a reasonable amount of computation time.     

Computing Approximate Solutions of the Maximum Covering Problem with GRASP

We consider the maximum covering problem, a combinatorial optimization problem that arises in many facility location problems. In this problem, a potential facility site covers a set of demand points. With each demand point, we associate a nonnegative weight. The task is to select a subset of p > 0 sites from the set of potential facility sites, such that the sum of weights of the covered demand points is maximized. We describe a greedy randomized adaptive search procedure (GRASP) for the maximum covering problem that finds good, though not necessarily optimum, placement configurations. We describe a well-known upper bound on the maximum coverage which can be computed by solving a linear program and show that on large instances, the GRASP can produce facility placements that are nearly optimal.     

Algorithms for a Facility Location Problem with Stochastic Customer Demand and Immobile Servers

This paper studies a facility location problem with stochastic customer demand and immobile servers. Motivated by applications to locating bank automated teller machines (ATMs) or Internet mirror sites, these models are developed for situations in which immobile service facilities are congested by stochastic demand originating from nearby customer locations. Customers are assumed to visit the closest open facility. The objective of this problem is to minimize customers' total traveling cost and waiting cost. In addition, there is a restriction on the number of facilities that may be opened and an upper bound on the allowable expected waiting time at a facility. Three heuristic algorithms are developed, including a greedy-dropping procedure, a tabu search approach and an -optimal branch-and-bound method. These methods are compared computationally on a bank location data set from Amherst, New York.     

Facility location models for planning a transatlantic communications network

This paper presents two facility location models for the problem of determining how to optimally serve the requirements for communication circuits between the United States and various European and Middle Eastern countries. Given a projection of future requirements, the problem is to plan for the economic growth of a communications network to satisfy these requirements. Both satellite and submarine cable facilities may be used. The objective is to find an optimal placement of cables (type, location, and timing) and the routing of individual circuits between demand points (over both satellites and cables) such that the total discounted cost over a T-period horizon is minimized. This problem is cast as a multiperiod, capacitated facility location problem. Two mathematical models differing in their provisions for network reliability are presented. Solution approaches are outlined and compared by means of computational experience. Use of the models both in planning the growth of the network and in the economic evaluation of different cable technologies is also discussed.     

Dynamic dairy facility location and supply chain planning under traffic congestion and demand uncertainty: A case study of Tehran

In this paper, dynamic dairy facility location and supply chain planning are studied through minimizing the costs of facility location, traffic congestion and transportation of raw/processed milk and dairy products under demand uncertainty. The proposed model dynamically incorporates possible changes in transportation network, facility investment costs, monetary value of time and changes in production process. In addition, the time variation and the demand uncertainty for dairy products in each period of the planning horizon is taken into account to determine the optimal facility location and the optimal production volumes. Computational results are presented for the model on a number of test problems. Also, an empirical case study is conducted in order to investigate the dynamic effects of traffic congestion and demand uncertainty on facility location design and total system costs.     

The probabilistic 1-maximal covering problem on a network with discrete demand weights

We discuss the probabilistic 1-maximal covering problem on a network with uncertain demand. A single facility is to be located on the network. The demand originating from a node is considered covered if the shortest distance from the node to the facility does not exceed a given service distance. It is assumed that demand weights are independent discrete random variables. The objective of the problem is to find a location for the facility so as to maximize the probability that the total covered demand is greater than or equal to a pre-selected threshold value. We show that the problem is NP-hard and that an optimal solution exists in a finite set of dominant points. We develop an exact algorithm and a normal approximation solution procedure. Computational experiment is performed to evaluate their performance.