Optimizing Facility Location and Design

Robert Aboolian1, Oded Berman2, Dmitry Krass2

  • 1California State University San Marcos
  • 2University of Toronto

Details

11:22 - 11:44 | Wed 28 Aug | 017 | WeAT8.2

Session: Decision-Making in Logistics and Supply Chains

Abstract

We develop a generalized framework and a novel methodology to simultaneously optimize locations and designs for a set of facilities that may be facing competition from pre-existing facilities. The framework focusses on proportional allocation (“gravity type") models where customer demand is distributed among many (typically all) available facilities in proportion to the “utility" a customer derives from a given facility. The methodology we develop allows us to separate design and location decisions, and appears quite effective, allowing for computing optimal solutions (up to user-defined tolerance level) to medium-size problems (with several hundred potential facility locations and up to 20 new facilities to be located) relatively quickly.