IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v289y2021i1p31-43.html
   My bibliography  Save this article

Optimizing facility location and design

Author

Listed:
  • Aboolian, Robert
  • Berman, Oded
  • Krass, Dmitry

Abstract

In this paper we develop a generalized framework and a novel methodology to simultaneously optimize locations and design decisions for a set of facilities that are facing competition from pre-existing facilities. The framework encompasses multi-attribute design decisions, an elastic customer demand mechanism that can capture both expansion and cannibalization effects, and a flexible demand allocation mechanism that encompasses both, proportional allocation (“gravity type”) and all-or-nothing models (such as p−median). Many classic location models appear as special cases of our Generalized Facility Location and Design Problem (GFLDP). We present an effective solution methodology, that allows us to approximate exact solutions to GDFLP to pre-selected accuracy levels. Our results show that not combining design and location decisions within a single model can lead to very substantial optimality gaps, thus underscoring the importance of GDFLP approach.

Suggested Citation

  • Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2021. "Optimizing facility location and design," European Journal of Operational Research, Elsevier, vol. 289(1), pages 31-43.
    • Handle: RePEc:eee:ejores:v:289:y:2021:i:1:p:31-43
    DOI: 10.1016/j.ejor.2020.06.044
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221720306020
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2020.06.044?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daniel Serra & Rosa Colomé, 2001. "articles: Consumer choice and optimal locations models: Formulations and heuristics," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(4), pages 439-464.
    2. Hakimi, S. Louis, 1983. "On locating new facilities in a competitive environment," European Journal of Operational Research, Elsevier, vol. 12(1), pages 29-35, January.
    3. Bretthauer, Kurt M. & Shetty, Bala, 2002. "The nonlinear knapsack problem - algorithms and applications," European Journal of Operational Research, Elsevier, vol. 138(3), pages 459-472, May.
    4. Eligius M. T. Hendrix, 2016. "On competition in a Stackelberg location-design model with deterministic supplier choice," Annals of Operations Research, Springer, vol. 246(1), pages 19-30, November.
    5. Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2007. "Competitive facility location model with concave demand," European Journal of Operational Research, Elsevier, vol. 181(2), pages 598-619, September.
    6. Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2007. "Competitive facility location and design problem," European Journal of Operational Research, Elsevier, vol. 182(1), pages 40-62, October.
    7. J. Redondo & J. Fernández & I. García & P. Ortigosa, 2009. "Sensitivity analysis of a continuous multifacility competitive location and design problem," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 17(2), pages 347-365, December.
    8. Oded Berman & Dmitry Krass, 2002. "Locating Multiple Competitive Facilities: Spatial Interaction Models with Variable Expenditures," Annals of Operations Research, Springer, vol. 111(1), pages 197-225, March.
    9. Gabriel R. Bitran & Arnoldo C. Hax, 1981. "Disaggregation and Resource Allocation Using Convex Knapsack Problems with Bounded Variables," Management Science, INFORMS, vol. 27(4), pages 431-441, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Méndez-Vogel, Gonzalo & Marianov, Vladimir & Lüer-Villagra, Armin & Eiselt, H.A., 2023. "Store location with multipurpose shopping trips and a new random utility customers’ choice model," European Journal of Operational Research, Elsevier, vol. 305(2), pages 708-721.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Burcin Bozkaya & Seda Yanik & Selim Balcisoy, 2010. "A GIS-Based Optimization Framework for Competitive Multi-Facility Location-Routing Problem," Networks and Spatial Economics, Springer, vol. 10(3), pages 297-320, September.
    2. Küçükaydin, Hande & Aras, Necati & Kuban AltInel, I., 2011. "Competitive facility location problem with attractiveness adjustment of the follower: A bilevel programming model and its solution," European Journal of Operational Research, Elsevier, vol. 208(3), pages 206-220, February.
    3. Rafael Suárez-Vega & Dolores Santos-Peñate & Pablo Dorta-González, 2014. "Location and quality selection for new facilities on a network market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 537-560, March.
    4. H Küçükaydın & N Aras & İ K Altınel, 2011. "A discrete competitive facility location model with variable attractiveness," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(9), pages 1726-1741, September.
    5. Kung, Ling-Chieh & Liao, Wei-Hung, 2018. "An approximation algorithm for a competitive facility location problem with network effects," European Journal of Operational Research, Elsevier, vol. 267(1), pages 176-186.
    6. Tammy Drezner & Zvi Drezner & Atsuo Suzuki, 2019. "A cover based competitive facility location model with continuous demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 66(7), pages 565-581, October.
    7. Gohram Baloch & Fatma Gzara, 2020. "Strategic Network Design for Parcel Delivery with Drones Under Competition," Transportation Science, INFORMS, vol. 54(1), pages 204-228, January.
    8. Fukasawa, Ricardo & Naoum-Sawaya, Joe & Oliveira, Daniel, 2024. "The price-elastic knapsack problem," Omega, Elsevier, vol. 124(C).
    9. Rafael Suárez‐Vega & Dolores R. Santos‐Peñate & Pablo Dorta‐González, 2004. "Competitive Multifacility Location on Networks: the (r∣Xp)‐Medianoid Problem," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 569-588, August.
    10. Rezapour, Shabnam & Farahani, Reza Zanjirani & Dullaert, Wout & De Borger, Bruno, 2014. "Designing a new supply chain for competition against an existing supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 124-140.
    11. Dong-Guen Kim & Yeong-Dae Kim, 2013. "A Lagrangian heuristic algorithm for a public healthcare facility location problem," Annals of Operations Research, Springer, vol. 206(1), pages 221-240, July.
    12. Blas Pelegrín & Pascual Fernández & María Dolores García Pérez, 2016. "Profit maximization and reduction of the cannibalization effect in chain expansion," Annals of Operations Research, Springer, vol. 246(1), pages 57-75, November.
    13. Xiang Li & Tianyu Zhang & Liang Wang & Hongguang Ma & Xiande Zhao, 2022. "A minimax regret model for the leader–follower facility location problem," Annals of Operations Research, Springer, vol. 309(2), pages 861-882, February.
    14. Zhang, Jianzhong & Xu, Chengxian, 2010. "Inverse optimization for linearly constrained convex separable programming problems," European Journal of Operational Research, Elsevier, vol. 200(3), pages 671-679, February.
    15. Mohammadivojdan, Roshanak & Geunes, Joseph, 2018. "The newsvendor problem with capacitated suppliers and quantity discounts," European Journal of Operational Research, Elsevier, vol. 271(1), pages 109-119.
    16. Luís M. Fernandes & Joaquim J. Júdice & Hanif D. Sherali & António P. Antunes, 2011. "Siting and Sizing of Facilities under Probabilistic Demands," Journal of Optimization Theory and Applications, Springer, vol. 149(2), pages 420-440, May.
    17. AgralI, Semra & Geunes, Joseph, 2009. "Solving knapsack problems with S-curve return functions," European Journal of Operational Research, Elsevier, vol. 193(2), pages 605-615, March.
    18. Junjie Wu & Jian Chen & Yili Ren, 2011. "GIS enabled service site selection: Environmental analysis and beyond," Information Systems Frontiers, Springer, vol. 13(3), pages 337-348, July.
    19. Zvi Drezner & Dawit Zerom, 2024. "A refinement of the gravity model for competitive facility location," Computational Management Science, Springer, vol. 21(1), pages 1-18, June.
    20. Vladimir Marianov & H. A. Eiselt, 2016. "On agglomeration in competitive location models," Annals of Operations Research, Springer, vol. 246(1), pages 31-55, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:289:y:2021:i:1:p:31-43. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.