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http://dx.doi.org/10.7232/IEIF.2011.24.4.341

Optimizing Zone-dependent Two-level Facility Location Problem  

Lim, Sung-Hoon (Defense Agency for Technology and Quality)
Sung, Chang-Sup (Department of Industrial and Systems Engineering, KAIST)
Song, Sang-Hwa (Graduate School of Logistics, University of Incheon)
Publication Information
IE interfaces / v.24, no.4, 2011 , pp. 341-350 More about this Journal
Abstract
This paper considers a problem of locating both distribution centers and retailers in a zone-dependent two-level distribution network where either a distribution center or a retailer should be located in each zone. Customer demands of each zone should be satisfied directly from either its own distribution center or its own retailer being supplied from a distribution center of another zone. The objective of the proposed problem is to minimize total cost being composed of distribution center/retailer setup costs and transportation costs. In the analysis, the problem is proved to be NP-hard, so that a branch-and-bound algorithm is derived for the problem. Numerical experiments show that the proposed branch-and-bound algorithm provides the optimal solution efficiently for some small problems.
Keywords
two-level; facility location; zone constraints; branch-and-bound;
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