Competitive Facility Location Problem- A Multi-Objective Genetic Algorithm

Abstract:

The Competitive Facility Location Problem deals with the cases where multiple competitors aim to maximize their market shares, and the problem is called the Competitive Maximal Covering Location Problem (CMCLP) based on the classical Maximal Covering Location Problem.  The CMCLP is typically modeled as a Stackelberg game in which the first player locates a fixed number of facilities, and then the other one takes a turn.  In this study, a genetic algorithm is proposed to generate multiple Pareto-optimal solutions rather than only Nash or Stackelberg-Nash equilibria.  The problem is transformed into a multi-objective problem where multiple competitors aim to gain maximum possible market share.  The objectives of the competitors are conflicting due to the dependencies among their decisions.  First, a mathematical formulation for the CMCLP with two competitors is presented; then, a multi-objective genetic algorithm is used to solve the problems with multiple competitors.  The main contribution of this study is that trade-offs among the competitor decisions can be investigated due to the multi-objective formulation of the problem.  Through the computational experiments, the mathematical model was used to verify that the genetic algorithm is able to approximate the true Pareto front. 

Short Bio

Sadan Kulturel‐Konak is a Professor of Management Information Systems and the director of the Flemming Creativity, Entrepreneurship and Economic Development (CEED) Center at Penn State Berks.  She received her Ph.D.in Industrial and Systems Engineering from Auburn University, USA.  Her research interests are in modeling and optimization of complex systems and robustness under uncertainty with applications to facility layout, reliability, and scheduling.  She has published her research in numerous journals including IIE Transactions, OR Letters, INFORMS Journal on Computing, INFORMS Transactions on Education, International Journal of Production Research, European Journal of Operational Research, and Journal of Intelligent Manufacturing Computers.  She is a member of the Institute for Operations Research and the Management Sciences (INFORMS), the Institute of Industrial and Systems Engineers (IISE) and the American Society for Engineering Education (ASEE).  She is currently the chair of the ASEE Middle Atlantic Section.  She has been a principal investigator in sponsored projects from National Science Foundation (NSF) and VentureWell.  sadan@psu.edu.