The Facility Location problem with joint disruptions

Malladi, V and Muthuraman, K (2017) The Facility Location problem with joint disruptions. Working Paper. The University of Texas at Austin. (Unpublished)

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Classical facility location problems do not incorporate the possibility of correlated disruptions amongst facilities and often result in solutions that are suboptimal. Existent Literature focuses on robust or independent disruption scenarios where the probability of disruptions is simplistic. We propose using Subordinated Markov chains to model the probability of the correlated risk of disruptions. Parameterizing the disruption probabilities offers more realistic and easy-to-simulate disruption distributions while using fewer parameters. We also propose algorithms that calibrate the Subordinated Markov Chain model and optimize for the facility location choices under correlated disruptions. Numerical Examples show that the correlation amongst disruptions alters the optimal facility location.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Item Type: Monograph (Working Paper)
Additional Information: The research article was published by the author with the affiliation of University of Texas at Austin
Uncontrolled Keywords: Facility Location, Independent Disruption, Markov chains, Optimal Facility Location
Subjects: Operations Management
Depositing User: Mohan Dass
Date Deposited: 09 Apr 2019 07:40
Last Modified: 09 Apr 2019 07:40
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