On single-source capacitated facility location with cost and fairness objectives

C. Filippi, G. Guastaroba and M.G. Speranza

European Journal of Operational Research, 2021, vol. 289, issue 3, 959-974

Abstract: We consider a location problem where a planner has to decide where to open facilities which have to be reached by customers at their own cost. The planner has two objectives: cost minimization and customer satisfaction. We argue that performance and fairness, as structural components of customer satisfaction, are both captured by an equity measure called conditional β-mean. We thus formulate the Fair Single-Source Capacitated Facility Location (F-SSCFL) problem, where the cost minimization objective is paired with the conditional β-mean minimization objective. The resulting formulation is a bi-objective mixed-integer linear program. A weighted sum method is developed to generate a small representative set of efficient solutions to the F-SSCFL problem, and a Benders decomposition approach is implemented to handle large-scale instances. On small/medium-scale instances, we analyse the trade-off between cost and conditional β-mean, showing that the model may be used as a managerial tool to balance direct costs and customer service. We also compare the quality of the solutions obtained with those obtained using alternative equity measures. On large-scale instances, we test Benders decomposition, showing that it is able to find good quality solutions in a relatively short computing time.

Keywords: Facility location; Fairness; Equity; Bi-objective programming; Benders decomposition (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:289:y:2021:i:3:p:959-974

DOI: 10.1016/j.ejor.2019.07.045

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