An Improved Voronoi-Diagram-Based Algorithm for Continuous Facility Location Problem under Disruptions

Jiguang Wang,Yucai Wu

doi:10.3390/su10093099

Abstract

The classical location models implicitly assume that the facilities, once built, will always operate as planned. However, some of the facilities may become unavailable from time to time due to disruptions which highlight the urgent need to effectively manage supply chain disruptions in spite of their low probability of occurrence. Therefore, it is critical to take account of disruptions when designing a resilient supply chain network so that it performs well as a whole even after an accidental disruption. In this paper, a stylized facility location problem is considered in a continuous plane which is solved through an improved Voronoi-diagram-based algorithm under disruption risks. The research problem is to minimize the total cost in normal and failure scenarios. Furthermore, the impact of misestimating the disruption probability is also investigated. The results numerically show that although the estimated disruption probability has a significant impact on the facilities configuration, it has a minor impact on the total quantity of facilities and the expected total cost. Therefore, this paper proposes that the decision-maker should moderately overestimate disruption risk based on the “pessimistic principle”. Finally, the conclusion considers managerial insights and proposes potential areas for future research.

Highlights

Today’s turbulent, fast-changing business environment and growing complexity of globalization has imposed unexpected and inevitable risks to supply chain networks
Recent global events show frequent reminders that we live in an unpredictable and changing world, and as such, many academicians and practitioners have paid a great deal of attention to supply chain facility disruptions for the purposes of enhancing supply chain decision makers’ disruption risk management efficiency and effectiveness
This paper considers a facility location problem in the presence of random facility disruption with imperfect estimation of the disruption risk

Summary

Introduction

Today’s turbulent, fast-changing business environment and growing complexity of globalization has imposed unexpected and inevitable risks to supply chain networks. Recent global events show frequent reminders that we live in an unpredictable and changing world, and as such, many academicians and practitioners have paid a great deal of attention to supply chain facility disruptions for the purposes of enhancing supply chain decision makers’ disruption risk management efficiency and effectiveness. In such an uncertain business environment, the facility location problem has become an increasingly important topic.

Literature Review

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