A hybrid model for multi-objective capacitated facility location network design problem

One of the primary concerns on many traditional capacitated facility location/network problems is to consider transportation and setup facilities in one single objective function. This simple assumption may lead to misleading solutions since the cost of transportation is normally considered for a short period time and, obviously, the higher cost of setting up the facilities may reduce the importance of the transportation cost/network. In this paper, we introduce capacitated facility location/network design problem (CFLNDP) with two separate objective functions in forms of multi-objective with limited capacity. The proposed model is solved using a new hybrid algorithm where there are two stages. In the first stage, locations of facilities and design of fundamental network are determined and in the second stage demands are allocated to the facilities. The resulted multi-objective problem is solved using Lexicography method for a well-known example from the literature with 21 node instances. We study the behaviour of the resulted problem under different scenarios in order to gain insight into the behaviour of the model in response to changes in key problem parameters.