Efficient primal-dual heuristic for a dynamic location problem

In this paper the dynamic location problem with opening, closure and reopening of facilities is formulated and an efficient primal-dual heuristic that computes both upper and lower limits to its optimal solution is described. The problem here studied considers the possibility of reconfiguring any location more than once over the planning horizon. This problem is NP-hard (the simple plant location problem is a special case of the problem studied). A primal-dual heuristic based on the work of Erlenkotter [A dual-based procedure for uncapacitated facility location. Operations Research 1978;26:992–1009] and Van Roy and Erlenkotter [A dual-based procedure for dynamic facility location. Management Science 1982;28:1091–105] was developed and tested over a set of randomly generated test problems. The results obtained are quite good, both in terms of the quality of lower and upper bounds calculated as in terms of the computational time spent by the heuristic. A branch-and-bound procedure that enables to optimize the problem is also described and tested over the same set of randomly generated problems.