Groupe d’études et de recherche en analyse des décisions

The value of flexibility in robust location-transportation problems

Amir Ardestani Jaafari HEC Montréal, Canada

We study a multi-period robust capacitated fixed-charge location-transportation problem in which, while the location and capacity of each facility need to be determined immediately, the determination of final production and distribution of products can be delayed until actual orders are received. It is well known that these types of problems are computationally intractable. To overcome this difficulty, we propose a set of tractable conservative approximations to the problem that each exploits to a different extent the idea of reducing the flexibility of the delayed decisions. A row-generation algorithm is also presented in order to address problem instances of realistic size.

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