Capacitated facility location problem with general setup cost

Authors:
Ling-Yun Wu;Xiang-Sun Zhang;Ju-Liang Zhang
Affiliations:
Institute of Applied Mathematics, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing, China;Institute of Applied Mathematics, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing, China;Department of Management Science and Engineering, School of Economics and Management, Tsinghua University, Beijing, China
Venue:
Computers and Operations Research
Year:
2006

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Abstract

This paper presents an extension of the capacitated facility location problem (CFLP), in which the general setup cost functions and multiple facilities in one site are considered. The setup costs consist of a fixed term (site setup cost) plus a second term (facility setup costs). The facility setup cost functions are generally non-linear functions of the size of the facility in the same site. Two equivalent mixed integer linear programming (MIP) models are formulated for the problem and solved by general MIP solver. A Lagrangian heuristic algorithm (LHA) is also developed to find approximate solutions for this NP-hard problem. Extensive computational experiments are taken on randomly generated data and also well-known existing data (with some necessary modifications). The detailed results are provided and the heuristic algorithm is shown to be efficient.