The use of reduction tests and simulated annealing for the capacitated plant location problem

Abstract

This paper discusses a new algorithm for the capacitated plant location problem. The first part of this algorithm consists of reduction tests to open or close facilities. Not all facilities may have their status determined this way. For the set of facilities that cannot be determined this way, we use simulated annealing (SA). Unfortunately, both reduction tests and SA imply the necessity for solving a great number of transportation problems. Therefore, the implementation may be greatly improved by using bounds based on Lagrangean relaxation. Computational results are presented for problems used by Beasley and based on Kuehn and Hamburger data.