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Demand point aggregation analysis for a class of constrained location models: A penalty function approach
Journal article

Demand point aggregation analysis for a class of constrained location models: A penalty function approach

Richard L. Francis, Timothy J. Lowe and Arie Tamir
IIE transactions, Vol.36(7), pp.601-609
07/2004
DOI: 10.1080/07408170490278210

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Abstract

Many location models involve location cost functions that depend on the distances between demand points and new facility locations. There can be so many demand points that they must be aggregated to obtain a tractable model. We consider a class of such problems where the location cost functions appear in both the objective and the constraints. By using the concept of a penalty function we obtain error bounds, that is, upper bounds on the errors introduced by aggregation. The error bounds can be used to drive demand point aggregation schemes, and consider both objective error and constraint error.

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