The capacity and distance constrained plant location problem

This article introduces a new problem called the Capacity and Distance Constrained Plant Location Problem. It is an extension of the discrete capacitated plant location problem, where the customers assigned to each plant have to be packed in groups that will be served by one vehicle each. The constraints include two types of capacity. On the one hand plants are capacitated, and the demands of the customers are indivisible. On the other hand, the total distance traveled by each vehicle to serve its assigned customers in round trips plant–customer–plant is also limited. The paper addresses different modeling aspects of the problem. It describes a tabu search algorithm for its solution. Extensive computational tests indicate that the proposed heuristic consistently yields optimal or near-optimal solutions.