Process Location And Product Distribution With Uncertain Yields

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Executive Summary

The paper considers the process location and product distribution problem with uncertain yield found across a wide range of industrial sectors such as food processing, pharmaceuticals, and specialty chemical manufacturers. In this problem, author chooses the location of processes, the assignment of products to these processes and the transportation of production quantities to markets in order to minimize total expected costs. Author develops heuristics to solve the problem and also construct lower bounds to evaluate the quality of these heuristics. An extensive computational study was conducted using realistic data. The methods are applied to data from a large food processing company and show that they could potentially decrease costs by 26%.

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