A robust optimization approach to a repair shop network planning

Abstract

Robust optimization model is a paradigm for decision-making under uncertainty, where parameters are given in the form of uncertainty sets. In this paper, we develop a robust optimization model for a repair shop network planning problem. The linear optimization model involves product of uncertain parameters in the constraints. We formulate its robust counterpart with the help of min-max regret and Lagrangian dual approach, considering the partial information of uncertain parameters is given in the form of ellipsoidal and polyhedral uncertainty sets. We also consider ellipsoidal+polyhedral uncertainty set, which is the intersection of ellipsoidal and polyhedral uncertainty sets. We apply the robust optimization model to a bi-objective multi-plant repair shop network planning problem where multiple pieces of equipment are repaired and overhauled using several resources over a multi-period planning horizon. We consider uncertainty in resource and demand parameters. Numerical examples are presented for illustrating the theoretical results.