Abstract
Facility location problems involve the selection of potential facilities that will be used as sources to satisfy a known demand at various customers that are to be serviced by the facilities. Associated with each potential facility is a capacity limitation on throuput and a cost function which is broken down into a fixed cost plus a transportation cost. Although a number of literature on the facility location problem have been published, problems considered in these literature assume that the demand at customers is constant.
The parametric facility location problem (PFLP) treated in this paper is to solve a facility location problem, in which the demand at various customers is varied continuously over a specified range. The variation of the demand at customers is formulated with a parmeter in the problem. In this paper, a branch-and-bound algorithm for solving PFLPs is developed. Also, a new concept of the parametric pegging test is proposed to improve the computational efficiency of the algorithm. Finally an illustrative example is given to show how the present algorithm works.
