When centers can fail: a close second opportunity

Abstract

This paper presents the p-next center problem, which aims to locate p out of n centers so as to minimize the maximum cost of allocating customers to backup centers. In this problem it is assumed that centers can fail and customers only realize that their closest (reference) center has failed upon arrival. When this happens, they move to their backup center, i.e., to the center that is closest to the reference center. Hence, minimizing the maximum travel distance from a customer to its backup center can be seen as an alternative approach to handle humanitarian logistics, that hedges customers against severe scenario deteriorations when a center fails.

For this extension of the p-center problem we have developed several different integer programming formulations with their corresponding strengthenings based on valid inequalities and variable fixing. The suitability of these formulations for solving the p-next center problem using standard software is analyzed in a series of computational experiments. These experiments were carried out using instances taken from the previous discrete location literature.