An Exact Algorithm for Multilevel Uncapacitated Facility Location

Abstract

We study a general class of multilevel uncapacitated p-location problems in which the selection of links between levels of facilities is part of the decision process. We propose an exact algorithm based on a Benders reformulation to solve large-scale instances of the general problem and some well-known particular cases. We exploit the network flow structure of the reformulation to efficiently generate Pareto-optimal cuts. We perform extensive computational experiments to assess the performance of several different variants of the Benders algorithm. Results obtained on benchmark instances with up to 3,000 customers, 250 potential facilities, and four levels confirm its efficiency.