The Maximum Return-on-investment Plant Location Problem with Market Share

This paper examines the plant location problem under the objective of maximizing return-on-investment. However, in place of the standard assumption that all demands must be satisfied, we impose a minimum acceptable level on market share. The model presented takes the form of a linear fractional mixed integer program. Based on prop- erties of the model, a local search procedure is developed to solve the problem heuris- tically. Variable neighborhood search and tabu search heuristics are also developed and tested. Thus, a useful extension of the simple plant location problem is examined, and heuristics are developed for the first time to solve realistic instances of this problem.