Reliable Capacitated Facility Location Problem with Service Levels

Reliable Capacitated Facility Location Problem with Service Levels

José A. Santiváñez and Héctor J. Carlo

This study is concerned with a generalized version of the reliable capacitated facility location problem that guarantees a minimum level of service level, i.e., satisfied demands, under correlated facility disruptions with unknown joint distribution. A linear mixed integer formulation for the generalized problem is presented and shown to correspond with the worst case (robust) problem when the service level function is submodular on the disruption scenarios. Experimental results show the effect of the service level parameters on the optimal solution. Keywords: reliable capacitated facility location problem; reliable capacitated fixed-charge location problem; disruption correlation; robust optimization