The most probable allocation solution for the p-median problem

Abstract

The most important purpose in location problems is usually to locate some facilities and allocate the demands of nodes so that the total transportation cost of the network is minimized. However, in real networks, there are some other influencing factors, aside from the transportation costs, for determin ing the allocation mode. In this paper, a minimum information approach is applied to the capacitated p-median problem to estimate the most likely allo cation solution based on some prior probabilities. Indeed, the most probable solution is achieved through minimizing a log-based objective function, while the total transportation cost should be less than or equal to a predetermined budget. The problem is solved by using a decomposition method combined with the Karush–Kuhn–Tucker optimality conditions, and some numerical examples are provided to verify the added value of the proposed model and solution approach.