A Robust Optimization Model of Facility Location-reliable Network Design in Competitive Environment under Uncertainty

In this article, it is proposed a mixed integer bi-criterion linear programming model for network design facility locations under uncertainty. This model takes into consideration the possibility of competition and interruption in servicing availability. The objective functions are of cost minimization and facility attraction maximization. Given the facts that customers’ demands as well as transportation expenses are uncertain, it has been employed robust type modeling of the problem, taking scenario approach into consideration. On the other hand, in order to consider the facility location in the competitive environment, the attractiveness function is used. In order to show the application of the proposed model, a real case study discussing the facility location design and facility implementation for a new CT-Scan system in Yazd province was studied. Results indicate that Yazd province has a capacity for three CT-Scans that can be positioned in the towns of Yazd, Meybod and Sadoogh. Finally, a sensitivity analysis is done to provide an insight into the behavior of the proposed model in response to key parameters changes of the problem. Additionally, to help the decision-makers in determining suitable solution, a tradeoff between solution robustness and model robustness for various values of parameter, is performed.