Reliable capacitated facility location problem with service levels

José A. Santiváñez () and Héctor J. Carlo
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José A. Santiváñez: Universidad del Turabo
Héctor J. Carlo: University of Puerto Rico – Mayagüez

EURO Journal on Transportation and Logistics, 2018, vol. 7, issue 4, No 2, 315-341

Abstract: Abstract This study is concerned with a generalized version of the reliable capacitated facility location problem that guarantees a minimum level of service level in terms of satisfied demands under correlated facility disruptions with uncertain joint distribution. A linear mixed integer formulation for the generalized problem is presented and shown to correspond with the worst-case (distributionally robust) problem when the service-level function is submodular on the disruption scenarios. Managerial insights, including the effect of service-level parameters on optimal solutions, are presented based on experimental results. It is concluded that the proposed model may be used to design supply chain networks with the same expected total cost than the traditional reliable capacitated facility location problem, but with an improved total expected service level.

Keywords: Reliable capacitated facility location problem; Reliable capacitated fixed-charge location problem; Disruption correlation; Robust optimization; 90B06; 90B80; 90C11 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s13676-018-0125-z

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