ASEAN industrial cooperation: The case of multi-product capacity expansion

The Association of South East Asian Nation (ASEAN) was formed in 1967 to promote economic growth in the region through regional cooperation. As a vivid manifestation of this cooperation, since 1976 various industrial projects have been designated as ASEAN industrial projects. A number of studies have been conducted to examine the feasibility, in a heuristic sense, of these projects as regional projects. In this paper, a mixed integer programming model is derived for the optimal locations and time phasing of a package of industrial projects as ASEAN projects. Two solution approaches are then formulated to provide optimal or close-to-optimal solutions to the model. The performance of these two approaches are then compared against a mixed integer programming code on several real-life versions of the ASEAN industrial cooperation problem. The results indicate that these approaches are extremely efficient in providing optimal solutions to the problem. Since industrial projects last over a long time, this model which allows for dynamic analysis of the ASEAN industrial cooperation problem is a useful extension of the static models developed so far.