An approximation algorithm for a facility location problem with stochastic demands and inventories

Authors:
A. F. Gabor;J. C. W. Van Ommeren
Affiliations:
Faculty of Electrical Engineering, Mathematics and Computer Science, University of Twente, Enschede, The Netherlands;Faculty of Electrical Engineering, Mathematics and Computer Science, University of Twente, Enschede, The Netherlands
Venue:
Operations Research Letters
Year:
2006

Citing 12
Cited 5

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Abstract

We propose a 2-approximation algorithm for a facility location problem with stochastic demands. At open facilities, inventory is kept such that arriving requests find a zero inventory with (at most) some pre-specified probability. Costs incurred are expected transportation costs, facility operating costs and inventory costs.