A heuristic approach for large scale discrete stochastic transportation-location problems

Abstract

AbstractAn effective heuristic for determining plant locations and shipments to customers is described. It is assumed that there are a discrete number of possible locations and that the demand at each destination is a random variable. Thus the problem is to minimize expected holding and shortage costs, in addition to linear shipping costs and fixed costs of construction. The algorithm uses dual variables to guide the determination of whether each plant should be opened or not