Solving the two-stage capacitated facility location problem by the lagrangian heuristic

Authors:
Igor Litvinchev;Edith Lucero Ozuna Espinosa
Affiliations:
Complex Systems Department, Computing Centre of Russian Academy of Sciences, Moscow, Russia;Faculty of Mechanical and Electrical Engineering, Nuevo Leon State University, Monterrey, Mexico
Venue:
ICCL'12 Proceedings of the Third international conference on Computational Logistics
Year:
2012

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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 a Lagrangian relaxation is analyzed and a Lagrangian heuristic producing feasible solutions is presented. The results of a computational study are reported.