Abstract
A method is presented to solve location problem of PSO-SOC, which is characterized as Minimum Concave-cost Multi-commodity Flow (MCMF) problem. Core idea of proposed solution procedure is the exploitation of network representation (NR). It is found that despite the solution is approached by an aggregate flow, our network representation could derive disaggregate flows, especially for those which deal with diverse cost functions among each commodity, such as production cost and revenue. In addition, our NR could deal with the situation where total supply is not in balance with total demand. The other characteristic of proposed solution procedure is that location decision of MCMF-NR is not represented by the binary number, as employed on most of location model. Location decision is represented by the flow on links associated to fixed-cost of facility. General heuristic algorithm related to Destination Spanning Tree development is suggested to solve the MCMF-NR, and an illustrative example is also discussed.
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