Optimal location of overwork-allowed facilities subject to choice of various equipment modes

Abstract

This thesis considers a facility location problem, which is concerned with locating facilities on a supply chain network and installing the associated equipments at the facilities to meet a given set of demands. These facilities include industrial plants, warehouses, and computing facilities in computer network systems. The objective is to minimize the sum of setup cost (facility opening cost and equipment installation cost), operation cost, and distribution cost. For the equipments, various choices of equipment modes are considered to select the best mode. Moreover, overwork is allowed at each facility but at expensive operation cost. The proposed problem is characterized as being an NP-hard problem, so that a Lagrangean relaxation based heuristic algorithm is derived. In order to evaluate the performance of the proposed algorithm, computational experiments with various numerical instances are conducted. The experiments show that the proposed algorithm gives good quality solutions within reasonable time.