The uncapacitated facility location problem

TLDR

The facility location problem seeks to choose facility sites to minimize the costs of locating and transporting goods to meet demand. The authors formulate the uncapacitated version as an integer program, enabling the use of powerful solution techniques.

Abstract

Abstract : An economic problem of great practical importance is to choose the location of facilities, such as industrial plants or warehouses, in order to minimize the cost (or maximize the profit) of satisfying the demand for some commodity. In general there are fixed costs for locating the facilities and transportation costs for distributing the commodities between the facilities and the clients. This problem has been extensively studied in the literature and is often referred to as the plant, warehouse or facility location problem. When each potential facility has a capacity, which is the maximum demand that it can supply, the problem is known as the capacitated facility location problem. When the capacity hypothesis is not needed, we have the simple or uncapacitated facility location problem, which the authors abbreviate by UL. The mathematical formulation of these problems as integer programs has proven very fruitful in the derivation of solution methods.