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In this paper, we develop a stochastic programming model for the capacitated location-allocation problem in the heterogeneous environment where the demands are distributed according to the Bernoulli function with different probabilities. The capacitated sub-sources of facilities are also involved to satisfy customers’ demands in this work. This study aims to find optimal locations of facilities and optimal allocations of existing customers to the facilities so that the total cost of operating facilities, allocating the customers, expected servicing and outsourcing is minimized. Due to the large amount of customers with different demand probabilities, accurate estimation of the outsourcing... 

Abstract In a recent work, Alizadeh et al. (2013) studied a capacitated multi-facility location-allocation problem in which customers had stochastic demands based on the Bernoulli distribution function. Authors considered capacitated sub-sources of facilities to satisfy customer demands. In this discrete stochastic problem, the goal was to find optimal locations of facilities among candidate locations and optimal allocations of existing customers to operating facilities so that the total sum of fixed costs of operating facilities, allocation costs of customers and expected values of servicing and outsourcing costs was minimized. The model was formulated as a mixed-integer nonlinear... 

We study a capacitated multi-facility location-allocation problem in which the customers have stochastic demands based on Bernoulli distribution function. We consider the capacitated sub-sources of facilities to satisfy demands of customers. In the discrete stochastic problem, the goal is to find optimal locations of facilities among candidate locations and optimal allocations of existing customers to operating facilities so that the total sum of fixed costs of operating facilities, allocation cost of the customers, expected values of servicing and outsourcing costs is minimized. The model is formulated as a mixed-integer nonlinear programming problem. Since finding an optimal solution may...