Lagrangian Bounds and a Heuristic for the Two-Stage Capacitated Facility Location Problem

Igor Litvinchev and Edith L. Ozuna
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Igor Litvinchev: Nuevo Leon State University, Mexico
Edith L. Ozuna: Nuevo Leon State University, Mexico

International Journal of Energy Optimization and Engineering (IJEOE), 2012, vol. 1, issue 1, 59-71

Abstract: In the two-stage capacitated facility location problem, a single product is produced at some plants in order to satisfy customer demands. The product is transported from these plants to some depots and then to the customers. The capacities of the plants and depots are limited. The aim is to select cost minimizing locations from a set of potential plants and depots. This cost includes fixed cost associated with opening plants and depots, and variable cost associated with both transportation stages. In this work, two different mixed integer linear programming formulations are considered for the problem. Several Lagrangian relaxations are analyzed and compared, and a Lagrangian heuristic producing feasible solutions is presented. The results of a computational study are reported.

Date: 2012
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