A Tabu Search Approach based on Strategic Vibration for Competitive Facility Location Problems with Random Demands

This paper proposes a new location problem of competitive facilities, e.g. shops and stores, with uncertain demands in the plain. By representing the demands for facilities as random variables, the location problem is formulated to a stochastic programming problem, and it is reformulated to three deterministic programming problems: expectation maximizing problem, probability maximizing problem, and satisfying level maximizing problem. After showing that one of their optimal solutions can be found by solving 0-1 programming problems, their solution method is proposed by improving the tabu search algorithm based on strategic vibration. The efficiency of the solution method is shown by applying it to numerical examples of the facility location problems.