Paper Info
Title
Heuristic algorithms for delivered price spatially competitive network facility location problems
Abstract
We review previous formulations of models for locating a firm's production facilities while simultaneously determining production levels at those facilities so as to maximize the firm's profit. We enhance these formulations by adding explicit variables to represent the firm's shipping activities and discuss the implications of this revised approach. In these formulations, existing firms, as well as new entrants, are assumed to act in accordance with an appropriate model of spatial equilibrium. The firm locating new production facilities is assumed to be a large manufacturer entering an industry composed of a large number of small firms. Our previously reported proof of existence of a solution to the combined location-equilibrium problem is briefly reviewed. A heuristic algorithm based on sensitivity analysis methods which presume the existence of a solution and which locally approximate price changes as linear functions of production perturbations resulting from newly established facilities is presented. We provide several numerical tests to illustrate the contrasting locational solutions which this paper's revised delivered price formulation generates relative to those of previous formulations. An exact, although computationally burdensome, method is also presented and employed to check the reliability of the heuristic algorithm.
Year
DOI
Venue
1992
10.1007/BF02098179
Annals of Operations Research
Keywords
Field
DocType
Location Problem,Small Firm,Heuristic Algorithm,Price Change,Facility Location
Numerical tests,Mathematical optimization,Heuristic,Heuristic (computer science),Facility location problem,Linear function,Mathematics
Journal
Volume
Issue
Citations 
34
1-4
22
PageRank 
References 
Authors
2.39
6
3
Name
Order
Citations
PageRank
Tan Miller1555.28
Terry L. Friesz222742.12
Roger L. Tobin320240.30