Track: Operations Research

Abstract

Facility location decisions is one of the most crucial commitments that manufacturing and service industries face to impacts their interaction with the end users or customers. This is a long term decision and recourse option is very difficult once the decision has been implemented. By optimally placing the facilities considering the probable future expansion in the market, a business entity can gain the dominance over its competitors. In the face of rapid urbanization and increasing demand, making facility location decision based only on existing demand is not optimal; taking into account possible realization of future demand would result in more robust decisions. The present study focuses on developing a mathematical model for making optimal decisions regarding healthcare facilities taking into account long term demand. It utilizes the concept of grid-based location problems to divide the area of interest into discrete cells. The model provides the optimal locations for facilities to be built at present time and the potential location of facilities in the future. Finally, the model is programmed with a standard modeling language and solved with the CPLEX solver. Results show that the model is efficient in solving small to moderate sized problems. The developed approach can be used by government or relevant entities to make optimal location decisions for healthcare or other service facilities.