Variable Neighborhood Search Approach for the Location and Design Problem

In this paper the location and design problem is considered. The point of this is that a Company is going to open markets to attract the largest share of total customers demand. This share varies flexibly depending on the markets location and its design variant. The Company vies for consumers demand with some pre-existing competitors markets. The mathematical model is nonlinear, therefore, there are difficulties in the application of exact methods and commercial solvers for it. The ways of constructing upper bounds of the objective function are described. Two algorithms based on the Variable Neighborhood Search approach are proposed. To study the algorithms a series of test instances similar to the real data of the applied problem has been constructed, experimental analysis is carried out. The results of these studies are discussed.