Abstract

AbstractIn this paper, we present a dynamic uncapacitated facility location problem that considers uncertainty in fixed and assignment costs as well as in the sets of potential facility locations and possible customers. Uncertainty is represented via a set of scenarios. Our aim is to minimize the expected total cost, explicitly considering regret. Regret is understood as a measure, for each scenario, of the loss incurred for not choosing that scenario's optimal solution if that scenario indeed occurred. We guarantee that the regret for each scenario is always upper bounded. We present a mixed integer programming model for the problem and we propose a solution approach based on Lagrangean relaxation integrating a local neighborhood search and a subgradient algorithm to update Lagrangean multipliers. The problem and the solutions obtained are first analyzed through the use of illustrative examples. Computational results over sets of randomly generated test problems are also provided.

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