Models for facility location & Capacity allocation

Capacitated plant location model

Management executives at both TelecomOne and HighOptic have decided to merge the two companies into a single entity to be called TelecomOptic. Management believes that significant benefits will result if the two networks are merged appropriately. TelecomOptic will have five factories from which to serve six markets. Management is debating whether all five factories are needed. It has assigned a supply chain team to study the network for the combined company and identify the plants that could be shut down.

Models for facility location & Capacity allocation Capacitated plant location model with single sourcing

In some cases, companies want to design supply chain networks in which a market is supplied from only one factory, referred to as a single source. Companies may impose this constraint because it lowers the complexity of coordinating the network and requires less flexibility from each facility.

Min $D_j{c}_{ij}{x}_{ij}{}_{\text{o}\text{v}\text{e}\text{r}}+tilde(f{)}_i{y}_i$ Total cost

${\displaystyle \underset{?}{\overset{?}{}}}{x}_{ij}=1,$ Market $j,j=1,.\mathrm{.}6$ Market constraints Desmysc

${\displaystyle \underset{j}{\overset{?}{}}}{x}_{ij}{K}_i{y}_i$ Factory $i,i=1,$dots,$5$ Factory constraints Supplwuy

$x_{ij}=1$ if Market $j$ is supplied from Factory i and $x_{ij}=0$ otherwise $y_i=0$ if Factory $i$ is to be shut down and $y_i=1$ otherwise.

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