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Sample average approximation applied to the capacitated-facilities location problem with unreliable facilities

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  • D Gade
  • E A Pohl

Abstract

The capacitated-facilities location problem (CFLP) deals with opening facilities with a finite capacity to serve a set of customers. This paper addresses the discrete CFLP when the opened facilities are unreliable, i.e. they are unavailable to provide service to customers. Such problems have gained prominence in the recent past owing to their application in the area of supply-chain disruptions. A stochastic programming formulation for the CFLP with unreliable facilities is presented and the benefit of investing in redundant facility locations is demonstrated. A sampling-based algorithm called the sample average approximation algorithm is used to approximately solve this model and present computational results.

Suggested Citation

  • D Gade & E A Pohl, 2009. "Sample average approximation applied to the capacitated-facilities location problem with unreliable facilities," Journal of Risk and Reliability, , vol. 223(4), pages 259-269, December.
    • Handle: RePEc:sae:risrel:v:223:y:2009:i:4:p:259-269
    DOI: 10.1243/1748006XJRR246
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    References listed on IDEAS

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    1. Umit Akinc & Basheer M. Khumawala, 1977. "An Efficient Branch and Bound Algorithm for the Capacitated Warehouse Location Problem," Management Science, INFORMS, vol. 23(6), pages 585-594, February.
    2. Yossi Sheffi, 2005. "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693496, April.
    3. Santoso, Tjendera & Ahmed, Shabbir & Goetschalckx, Marc & Shapiro, Alexander, 2005. "A stochastic programming approach for supply chain network design under uncertainty," European Journal of Operational Research, Elsevier, vol. 167(1), pages 96-115, November.
    4. Lawrence V. Snyder & Mark S. Daskin, 2005. "Reliability Models for Facility Location: The Expected Failure Cost Case," Transportation Science, INFORMS, vol. 39(3), pages 400-416, August.
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    Cited by:

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    2. Diabat, Ali & Jabbarzadeh, Armin & Khosrojerdi, Amir, 2019. "A perishable product supply chain network design problem with reliability and disruption considerations," International Journal of Production Economics, Elsevier, vol. 212(C), pages 125-138.

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