A Bilevel Fixed Charge Location Model for Facilities under Imminent Att.
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IE-OPIM Joint Seminar

Deniz Aksen - Koç University, College of Administrative Sciences and EconomicsNovember

“A Bilevel Fixed Charge Location Model for Facilities under Imminent Attack”

We investigate a bilevel fixed charge facility location problem for a system planner (the defender)who has to provide public service to customers. The defender cannot dictate customer-facilityassignments since customers pick their facility of choice according to its proximity. Thus, each facilitymust have sufficient capacity installed to accommodate all customers for whom it is the closest one.Facilities can be opened either in the protected or unprotected mode. Protection immunizes againstan attacker who is capable of destroying at most r unprotected facilities in the worst-case scenario.Partial protection or interdiction is not possible. The defender selects facility sites from m candidatelocations which have different fixed opening and protection costs. The attacker is assumed to knowthe unprotected facilities with certainty. He makes his interdiction plan so as to maximize the totalpost-attack cost incurred by the defender. If a facility has been interdicted, its customers arereallocated to the closest available facilities making capacity expansion necessary.The problem is formulated as a static Stackelberg game between the defender (leader) and theattacker (follower). Two solution methods are proposed. The first is a tabu search heuristic where ahash function calculates and records the hash values of all visited solutions for the purpose ofavoiding cycling. The second is a sequential method in which the location and protection decisionsare separated. Both methods are tested on 60 randomly generated instances in which m ranges from10 to 30, and r varies between 1 and 3. The solutions are further validated by means of an exhaustivesearch algorithm. Test results show that the defender’s facility opening plan is sensitive to theprotection and distance costs.This is a joint work with Prof. Necati Aras from Boğaziçi University.

BIO: Deniz Aksen received his BS (1994) and MS (1996) degrees inIndustrial Engineering from Boğaziçi University. In 1998 he hadpublished the first unofficial primer of the celebrated mathematicalmodeling software suite GAMS. He graduated in 2003 from KrannertGraduate School of Management of Purdue University (Indiana, USA)with a Ph.D. degree in MIS, and joined in the same year the College ofAdministrative Sciences and Economics (CASE) of Koç University inİstanbul. Dr. Aksen teaches MIS and e-commerce courses at CASE. Hisresearch focuses mainly on collection and distribution logistics,facility location and interdiction, and heuristic methods for NP-hardoptimization problems.

 23, 2011, Wednesday @ 13:40pm @ FENS L045