Optimizing strategic planning in median systems subject to uncertain disruption and gradual recovery
This paper addresses the capacity planning of facilities in median systems at an early stage so that, if potential disruptions arise and forecast demand is misestimated, overall costs are minimized.We consider some realistic features such as uncertainty in the magnitude, time and location of disruptions as well as gradual recovery of disrupted facilities over time. The proposed two-stage stochastic linear program (2-SLP) is solved in a computationally efficient way via an enhanced implementation of the stochastic decomposition method. To ascertain the quality of the solutions obtained some deterministic bounds are calculated.
KeywordsMaster Problem Facility Location Problem Dependent Random Variable Gradual Recovery Unmet Demand
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