Formulation and solution of a two-stage capacitated facility location problem with multilevel capacities

Irawan, Chandra Ade and Jones, Dylan (2018) Formulation and solution of a two-stage capacitated facility location problem with multilevel capacities. Annals of Operations Research, 272 (1-2). pp. 41-67. ISSN 0254-5330

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In this paper, the multi-product facility location problem in a two-stage supply chain is investigated. In this problem, the locations of depots (distribution centres) need to be determined along with their corresponding capacities. Moreover, the product flows from the plants to depots and onto customers must also be optimised. Here, plants have a production limit whereas potential depots have several possible capacity levels to choose from, which are defined as multilevel capacities. Plants must serve customer demands via depots. Two integer linear programming (ILP) models are introduced to solve the problem in order to minimise the fixed costs of opening depots and transportation costs. In the first model, the depot capacity is based on the maximum number of each product that can be stored whereas in the second one, the capacity is determined by the size (volume) of the depot. For large problems, the models are very difficult to solve using an exact method. Therefore, a matheuristic approach based on an aggregation approach and an exact method (ILP) is proposed in order to solve such problems. The methods are assessed using randomly generated data sets and existing data sets taken from the literature. The solutions obtained from the computational study confirm the effectiveness of the proposed matheuristic approach which outperforms the exact method. In addition, a case study arising from the wind energy sector in the UK is presented.

Item Type: Article
Keywords: Facility location; Matheuristic; ILP
Schools/Departments: University of Nottingham Ningbo China > Faculty of Business > Nottingham University Business School China
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Depositing User: Wu, Cocoa
Date Deposited: 28 Feb 2020 05:59
Last Modified: 28 Feb 2020 05:59

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