New lower bounds for the facility location problem with clients’ preferences

Abstract

A bilevel facility location problem in which the clients choose suppliers based on their own preferences is studied. It is shown that the coopertative and anticooperative statements can be reduced to a particular case in which every client has a linear preference order on the set of facilities to be opened. For this case, various reductions of the bilevel problem to integer linear programs are considered. A new statement of the problem is proposed that is based on a family of valid inequalities that are related to the problem on a pair of matrices and the set packing problem. It is shown that this formulation is stronger than the other known formulations from the viewpoint of the linear relaxation and the integrality gap.

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