Facility Location-Network Design Problem: Reliability and Investment Budget Constraint

Abstract

The simultaneous consideration of combined facility location and network design is an attractive empirical topic for locating public and private facilities and for reducing transportation costs. Moreover, applying a reliable facility location problem is one of the most effective ways to protect against occasional failures of the system, because of considering unexpected failures and possible customer reassignment when locating facilities. Accordingly, this study concerns a reliable combined facility location–network design problem regarding the investment budget constraint and proposes a mixed integer nonlinear programming formulation to model this constraint. The proposed model is linearized by suitable techniques. Also, a practical case study subject to sustainable design in urban health care development is presented in detail to illustrate the application of the proposed mathematical model. Finally, a sensitivity analysis is conducted to provide insights into the behavior of the proposed model in response to the changes of key parameters of the problem.