The Reliable Facility Location Problem: Formulations, Heuristics, and Approximation Algorithms

Zuo‐Jun Max Shen · Roger Lezhou Zhan · Jiawei Zhang

234 citations0/0 files storedINFORMS journal on computing

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Facility Location and Emergency Management Complexity and Algorithms in Graphs Optimization and Search Problems

Abstract

We study a reliable facility location problem wherein some facilities are subject to failure from time to time. If a facility fails, customers originally assigned to it have to be reassigned to other (operational) facilities. We formulate this problem as a two-stage stochastic program and then as a nonlinear integer program. Several heuristics that can produce near-optimal solutions are proposed for this NP-hard problem. For the special case where the probability that a facility fails is a constant (independent of the facility), we provide an approximation algorithm with a worst-case bound of 4. The effectiveness of our heuristics is tested by extensive computational studies, which also lead to some managerial insights.

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References

2002The Sample Average Approximation Method for Stochastic Discrete Optimization 1998Strategic facility location: A review 1991Discrete location theory 1997Network and Discrete Location: Models, Algorithms and Applications.2004A stochastic programming approach for supply chain network design under uncertainty 2006Facility location under uncertainty: a review 1995Network and Discrete Location 2005Reliability Models for Facility Location: The Expected Failure Cost Case

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2017Location and Emergency Inventory Pre‐Positioning for Disaster Response Operations: Min‐Max Robust Model and a Case Study of Yushu Earthquake 2013Robust and reliable forward–reverse logistics network design under demand uncertainty and facility disruptions 2016Designing a supply chain resilient to major disruptions and supply/demand interruptions 2014Reliable p-median facility location problem: two-stage robust models and algorithms 2010The Effect of Supply Disruptions on Supply Chain Design Decisions

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