Multi-period international facilities location: An algorithm and application

Abstract

In today's markets, customers want to buy the best quality products at the lowest prices, regardless of where they are produced. Hence, most companies can no longer afford to operate in a single domestic market. To penetrate global markets and obtain their benefits, companies are under tremendous pressure to be competitive and to reduce their production costs. Establishing foreign manufacturing facilities has therefore been taking place rapidly and is further enhanced by trade agreements such as NAFTA. Even though there has been much written on facilities location, in general the literature on international facilities location is rather limited. This paper surveys the available literature and provides an efficient branch and bound procedure for solving the uncapacitated multi-period international facilities location problem. This branch and bound procedure is applied to a case study and tested for its efficiency. The solutions and computation times are compared with those obtained using LINDO. This extensive computational analysis has been extremely promising.

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