Title
Robust strategies for facility location under uncertainty.
Abstract
This paper considers a stochastic facility location problem in which multiple capacitated facilities serve customers with a single product, and a stockout probabilistic requirement is stated as a chance constraint. Customer demand is assumed to be uncertain and to follow either a normal or an ambiguous distribution. We study robust approximations to the problem in order to incorporate information about the random demand distribution in the best possible, computationally tractable way. We also discuss how a decision maker's risk preferences can be incorporated in the problem through robust optimization. Finally, we present numerical experiments that illustrate the performance of the different robust formulations. Robust optimization strategies for facility location appear to have better worst-case performance than nonrobust strategies. They also outperform nonrobust strategies in terms of realized average total cost when the actual demand distributions have higher expected values than the expected values used as input to the optimization models. (C) 2012 Elsevier B.V. All rights reserved.
Year
DOI
Venue
2013
10.1016/j.ejor.2012.08.004
European Journal of Operational Research
Keywords
Field
DocType
Robust facility location decisions,Robust inventory management,Ambiguous demand distributions,Robust approximations to chance constraints
Mathematical optimization,Robust optimization,Random demand,Facility location problem,Expected value,Probabilistic logic,Total cost,Stockout,Operations management,Mathematics,Decision maker
Journal
Volume
Issue
ISSN
225
1
0377-2217
Citations 
PageRank 
References 
13
0.59
23
Authors
3
Name
Order
Citations
PageRank
Nalan Gülpinar1696.64
Dessislava Pachamanova228017.89
Ethem Çanakoglu3807.80