A Continuum Approximation Approach to the Dynamic Facility Location Problem in a Growing Market

This paper proposes a continuum approximation (CA) model to solve the dynamic facility location problem for a large-scale growing market. The objective is to determine the optimal facility location and deployment time that minimize the costs for facility construction and customer service in a planning horizon. To overcome computational challenges, the CA model determines the optimal facility density in the spatiotemporal continuum. Then the authors propose a tube model to discretize the resulting continuous facility density function into a set of time-varying facility location trajectories. To enforce consistency in facility location over time, an iterative regulation procedure based on a penalty method is applied. The authors present convergence properties of the proposed procedure and further derive conditions under which the CA approach and the tube model yield tight approximation error bounds. The authors conduct a series of numerical experiments to illustrate the applicability and computational performance (e.g., accuracy and convergence) of the proposed modeling framework, first via comparison with discrete model counterparts using hypothetical data, and then via application to an empirical case for the state of Illinois. The authors' results show that the proposed method effectively solves the dynamic facility location problem to reasonable accuracy. Various managerial insights are also drawn.

• Record URL:
  https://doi.org/10.1287/trsc.2015.0649
• Record URL:
  http://pubsonline.informs.org/doi/abs/10.1287/trsc.2015.0649
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/oclc/1767714
• Supplemental Notes:
  • Abstracts reprinted with permission of INFORMS (Institute for Operations Research and the Management Sciences, http://www.informs.org).
• Authors:
  • Wang, Xin
  • Lim, Michael K
  • Ouyang, Yanfeng
• Publication Date: 2017-2

Language

• English

Media Info

• Media Type: Web
• Features: References;
• Pagination: pp 343-357
• Serial:
  • Transportation Science
  • Volume: 51
  • Issue Number: 1
  • Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
  • ISSN: 0041-1655
  • Serial URL: http://transci.journal.informs.org/

Subject/Index Terms

• TRT Terms: Continuum (Mathematics); Costs; Customer service; Dynamic models; Facilities; Location; Optimization
• Uncontrolled Terms: Spatiotemporal models
• Geographic Terms: Illinois
• Subject Areas: Freight Transportation; Planning and Forecasting; Terminals and Facilities;

Filing Info

• Accession Number: 01633976
• Record Type: Publication
• Files: TRIS
• Created Date: May 1 2017 9:37AM