A Plant and Warehouse Location Problem

A model is proposed for the simultaneous location of plants and warehouses among a given set of possible locations in order to satisfy a given demand at minimum cost. The demand of each customer may be satisfied directly from a plant or through a warehouse. The model also applies to the design of a distribution network with two levels of warehouses. A branch-and-bound algorithm, which generalizes previous work by Efroymson and Ray and others, is presented, computational experience is reported on.