Abstract
A multi-period model for optimum decision of capacity and location of plants was constructed, where the upper limit of plant capacity and additional construction and replacement of plants are considered. The problem was formulated as a 0-1 mixed integer programming probelm minimizing the total discounted cost for construction, production and transportation. A decomposition algorithm calculating ε-optimum for solving the problem based on the idea of Benders decomposition was developed, accompanied with the procedure of reducing variables by ordering candidate points. The feasibility and resonability of the algorithm developed were shown by solving a numerical example.
