A Two-Phase Framework for Facility Location Decision Under Demand Uncertainty and Travel Time Fluctuation

Ecem Yıldız a, Yeliz Ekinci b a Institute of Graduate Studies in Science and Engineering, Istanbul Bilgi University, Istanbul, Turkey b Department of Industrial Engineering, Istanbul Bilgi University, Istanbul, Turkey Abstract: This study solves the facility location problem of an IT service company whose main problem is to arrive at the customer’s site in the shortest time when support is needed. This problem should consider both the demand of the customers and the distance and/or travel time between the customers and the company. Travel times and demand are not constant since they are affected by many factors. Therefore, one should take into account uncertainty. This study formulates the problem by considering the demand as fuzzy and travel time as varying based on different time intervals, which are defined hourly, daily and seasonally. Moreover, we consider the cases of minimum speed, average speed and maximum speed for travel time. We illustrate the application of the proposed framework using data of a company. We compare the proposed framework with the traditional distance based optimization approach and show the advantages of the proposed method.