Generating optimal and near-optimal solutions to facility location problems

Abstract

There is a decided bent toward finding an optimal solution to a given facility location problem instance, even when there may be multiple optima or competitive near-optimal solutions. Identifying alternate solutions is often ignored in model application, even when such solutions may be preferred if they were known to exist. In this paper we discuss why generating close-to-optimal alternatives should be the preferred approach in solving spatial optimization problems, especially when it involves an application. There exists a classic approach for finding all alternate optima. This approach can be easily expanded to identify all near-optimal solutions to any discrete location model. We demonstrate the use of this technique for two classic problems: the p-median problem and the maximal covering location problem. Unfortunately, we have found that it can be mired in computational issues, even when problems are relatively small. We propose a new approach that overcomes some of these computational issues in finding alternate optima and near-optimal solutions.