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Facility location based on Adjusted Present Value

Author

Listed:
  • Hamidreza Rezaei

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Nathalie Bostel

    (Nantes Univ - Nantes Université, LS2N - équipe MODELIS - Modélisation, Optimisation et DEcision pour la Logistique, l'Industrie et les Services - LS2N - Laboratoire des Sciences du Numérique de Nantes - Inria - Institut National de Recherche en Informatique et en Automatique - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - ECN - NANTES UNIVERSITÉ - École Centrale de Nantes - Nantes Univ - Nantes Université - Nantes univ - UFR ST - Nantes université - UFR des Sciences et des Techniques - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université, LS2N - Laboratoire des Sciences du Numérique de Nantes - Inria - Institut National de Recherche en Informatique et en Automatique - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - ECN - NANTES UNIVERSITÉ - École Centrale de Nantes - Nantes Univ - Nantes Université - Nantes univ - UFR ST - Nantes université - UFR des Sciences et des Techniques - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université)

  • Vincent Hovelaque

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, IGR-IAE Rennes - Institut de Gestion de Rennes - Institut d'Administration des Entreprises - Rennes - UR - Université de Rennes)

  • Olivier Péton

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], LS2N - équipe MODELIS - Modélisation, Optimisation et DEcision pour la Logistique, l'Industrie et les Services - LS2N - Laboratoire des Sciences du Numérique de Nantes - Inria - Institut National de Recherche en Informatique et en Automatique - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - ECN - NANTES UNIVERSITÉ - École Centrale de Nantes - Nantes Univ - Nantes Université - Nantes univ - UFR ST - Nantes université - UFR des Sciences et des Techniques - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université)

  • Jean-Laurent Viviani

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

Supply chain network design aims to optimize strategic decisions such as facility location decisions. These decisions have a major impact on the supply chain, but also on the financial value of the company. However, financial considerations are often omitted from facility location mathematical models. This paper addresses the challenge of identifying a relevant financial indicator that can be practically implemented in facility location models across different industries. This paper makes several contributions: the Adjusted Present Value (APV) is identified as such a financial indicator; we propose a mathematical formulation that embeds the APV in a facility location model maximizing firm value; computational experiments demonstrate the tractability of the model. Finally, we compare the mathematical model with a sequential approach that first optimizes logistical decisions and then financial decisions. The proposed model improves the sequential approach up to 5.5%, increases the market coverage and anticipates facility location decisions.

Suggested Citation

  • Hamidreza Rezaei & Nathalie Bostel & Vincent Hovelaque & Olivier Péton & Jean-Laurent Viviani, 2025. "Facility location based on Adjusted Present Value," Post-Print hal-04917223, HAL.
    • Handle: RePEc:hal:journl:hal-04917223
    DOI: 10.1016/j.orp.2024.100319
    Note: View the original document on HAL open archive server: https://cnrs.hal.science/hal-04917223v1
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