An e-commerce facility location problem under uncertainty

Facility location problem is a branch of operations research and computational geometry. It covers the best allocation of facilities to minimize transportation costs by considering the factors involved (e.g., avoiding the placement of dangerous materials near the premises and the facilities of competitors). Given the unique customer characteristics and the fierce market competition of business-to-consumer e-commerce, the expected value model and chance-constrained model for uncertain facility location problems were constructed. Owing to the intricacies of the competitive market, supply capacity, delivery cost, and customer demand were assumed as uncertain variables. The deterministic equivalent forms of the models were discussed using the inverse uncertainty distribution method. A hybrid algorithm was proposed to solve these models. Some numerical experiments were used to verify the effectiveness of the proposed models and method. (C) 2021 Sharif University of Technology. All rights reserved.