An Improved Voronoi-Diagram-Based Algorithm for Continuous Facility Location Problem under Disruptions

Jiguang Wang and Yucai Wu
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Jiguang Wang: School of Economics & Management, Shanxi University, Taiyuan 030006, China
Yucai Wu: School of Economics & Management, Shanxi University, Taiyuan 030006, China

Sustainability, 2018, vol. 10, issue 9, 1-13

Abstract: The classical location models implicitly assume that the facilities, once built, will always operate as planned. However, some of the facilities may become unavailable from time to time due to disruptions which highlight the urgent need to effectively manage supply chain disruptions in spite of their low probability of occurrence. Therefore, it is critical to take account of disruptions when designing a resilient supply chain network so that it performs well as a whole even after an accidental disruption. In this paper, a stylized facility location problem is considered in a continuous plane which is solved through an improved Voronoi-diagram-based algorithm under disruption risks. The research problem is to minimize the total cost in normal and failure scenarios. Furthermore, the impact of misestimating the disruption probability is also investigated. The results numerically show that although the estimated disruption probability has a significant impact on the facilities configuration, it has a minor impact on the total quantity of facilities and the expected total cost. Therefore, this paper proposes that the decision-maker should moderately overestimate disruption risk based on the “pessimistic principle”. Finally, the conclusion considers managerial insights and proposes potential areas for future research.

Keywords: facility network design; disruption; continuous approximation; misestimation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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