The vendor location problem

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Author
Çınar, Y.
Yaman, H.
Date
2011Journal Title
Computers & Operations Research
Print ISSN
0305-0548
Electronic ISSN
1873-765X
Publisher
Elsevier
Volume
38
Issue
12
Pages
1678 - 1695
Language
English
Type
Article
Metadata
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http://hdl.handle.net/11693/21710Abstract
The vendor location problem is the problem of locating a given number of vendors and determining the number of vehicles and the service zones necessary for each vendor to achieve at least a given profit. We consider two versions of the problem with different objectives: maximizing the total profit and maximizing the demand covered. The demand and profit generated by a demand point are functions of the distance to the vendor. We propose integer programming models for both versions of the vendor location problem. We then prove that both are strongly NP-hard and we derive several families of valid inequalities to strengthen our formulations. We report the outcomes of a computational study where we investigate the effect of valid inequalities in reducing the duality gaps and the solution times for the vendor location problem.