A fractional programming model for international facility location

Abstract

This paper presents a new mixed integer non-linear fractionalprogramming model for multi-commodity, multi-period, budgetconstrained and capacitated global supply chain design problem. Ourmodel simultaneously optimizes the facility location, capacityacquisition, and production-distribution decisions so as to maximizethe profitability of the total investment over a planning horizon.The model is also compared with the profit-maximization model andthe cost-minimization model. A branch-and-bound method and arounding heuristic algorithm are developed to tackle the problem athand. The computational results of solving 30 instances generatedrandomly show that our proposed model differs fundamentally from theother models and the rounding heuristic algorithm provides anefficient solution.