Date on Master's Thesis/Doctoral Dissertation

5-2017

Document Type

Doctoral Dissertation

Degree Name

Ph. D.

Department

Industrial Engineering

Degree Program

Industrial Engineering, PhD

Committee Chair

Heragu, Sunderesh

Committee Co-Chair (if applicable)

DePuy, Gail

Committee Member

DePuy, Gail

Committee Member

Usher, John

Committee Member

Gupta, Mahesh

Author's Keywords

facility location; multi-period; competition; linear model; opening; closing; expansion and shrinkage; service industry

Abstract

This thesis develops a multi-period, mathematical programming location model for facilities operating in a competitive environment. The objective is to maximize the profit in a variable demand environment. The solution of the problem can either be done in a robust or in a dynamic manner. A robust solution methodology forecasts the demand for all the periods in the planning horizon and provides a robust solution that may be suboptimal for any given period, but optimal when all the periods are taken into consideration. A problem with this approach is that it requires accurate forecast of demand for multiple periods into the future, which is not easy especially when the number of periods is large or the length of each period is long. The dynamic solution methodology circumvents this problem by only considering the demand for the next period in making location decisions. The drawback of this approach is that it may call for frequent closing of existing facilities and opening of new or previously closed facilities and the cost of doing so may be rather high in many environments. However, the cost of opening and closing facilities may not be as high as the benefits of doing so for many service organizations.