Improved algorithms for joint optimization of facility locations and network connections

This paper studies a k-median Steiner forest problem that jointly optimizes the opening of at most k facility locations and their connections to the client locations, so that each client is connected by a path to an open facility, with the total connection cost minimized. The problem has wide applications in the telecommunication and transportation industries, but is strongly NP-hard. In the literature, only a 2-approximation algorithm is known, it being based on a Lagrangian relaxation of the problem and using a sophisticated primal-dual schema. In this study, we have developed an improved approximation algorithm using a simple transformation from an optimal solution of a minimum spanning tree problem. Compared with the existing 2-approximation algorithm, our new algorithm not only achieves a better approximation ratio that is easier to be proved, but also guarantees to produce solutions of equal or better quality—up to 50 percent improvement in some cases. In addition, for two non-trivial special cases, where either every location contains a client, or all the locations are in a tree-shaped network, we have developed, for the first time in the literature, new algorithms that can solve the problem to optimality in polynomial time.