IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v51y2000i6d10.1057_palgrave.jors.2600943.html
   My bibliography  Save this article

The maximum return-on-investment plant location problem

Author

Listed:
  • J Brimberg

    (University of Prince Edward Island)

  • C ReVelle

    (The Johns Hopkins University)

Abstract

The standard plant location problem determines which plants to open from a set of potential sites in order to satisfy the demands at a set of customer vertices at a minimum total cost. However, the optimal solution may exceed a limit on investment costs imposed on the enterprise in a practical setting. This paper examines the plant location problem in an environment in which the investment in plant and equipment is also an objective to be minimised. The problem is posed as a bicriterion model which examines the tradeoff between the sum of operational and investment costs and investment cost (or total cost vs sunk cost). A weighting method is used to generate efficient solutions, one of which is shown to maximise the return on investment. The integer-friendliness of the LP relaxation is investigated.

Suggested Citation

  • J Brimberg & C ReVelle, 2000. "The maximum return-on-investment plant location problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 51(6), pages 729-735, June.
    • Handle: RePEc:pal:jorsoc:v:51:y:2000:i:6:d:10.1057_palgrave.jors.2600943
    DOI: 10.1057/palgrave.jors.2600943
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2600943
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2600943?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.

    Citations

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


    Cited by:

    1. ReVelle, C. S. & Eiselt, H. A., 2005. "Location analysis: A synthesis and survey," European Journal of Operational Research, Elsevier, vol. 165(1), pages 1-19, August.
    2. Wenxuan Shan & Qianqian Yan & Chao Chen & Mengjie Zhang & Baozhen Yao & Xuemei Fu, 2019. "Optimization of competitive facility location for chain stores," Annals of Operations Research, Springer, vol. 273(1), pages 187-205, February.
    3. Pierre Hansen & Jack Brimberg & Dragan Urošević & Nenad Mladenović, 2007. "Primal-Dual Variable Neighborhood Search for the Simple Plant-Location Problem," INFORMS Journal on Computing, INFORMS, vol. 19(4), pages 552-564, November.
    4. Marchioni, Andrea & Magni, Carlo Alberto, 2018. "Investment decisions and sensitivity analysis: NPV-consistency of rates of return," European Journal of Operational Research, Elsevier, vol. 268(1), pages 361-372.
    5. J Brimberg & P Hansen & G Laporte & N Mladenović & D Urošević, 2008. "The maximum return-on-investment plant location problem with market share," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(3), pages 399-406, March.
    6. Mladenovic, N. & Brimberg, J. & Hansen, P., 2006. "A note on duality gap in the simple plant location problem," European Journal of Operational Research, Elsevier, vol. 174(1), pages 11-22, October.
    7. Menezes, Mozart B.C. & Kim, Seokjin & Huang, Rongbing, 2015. "Return-on-investment (ROI) criteria for network design," European Journal of Operational Research, Elsevier, vol. 245(1), pages 100-108.

    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:pal:jorsoc:v:51:y:2000:i:6:d:10.1057_palgrave.jors.2600943. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    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.