Abstract: Threshold stability of a facility location and discriminatory pricing problem is studied. First, the company locates facilities and assigns service prices to clients. Each client selects the facility with the lowest cost of purchasing and transporting products, and makes a purchase if the cost does not exceed its budget. The goal is to find such a feasible solution and such a maximum deviation from the clients’ budgets that the company’s profit is not less than a given threshold. Three approximate algorithms based on Variable Neighborhood Descent (VND) are developed. Facility locations are iteratively enumerated. For each location, the pricing problem is solved. The algorithms differ in the criterion for comparing different facility locations: 1) maximizing the company profit; 2) maximizing the threshold stability radius; and 3) a combination of 1) and 2). The work was supported by the Russian Science Foundation (project 23-21-00424).

Cite: Piskeeva D. , Panin A. , Plyasunov A.
VND metaheuristics for threshold stability in a facility location and discriminatory pricing problem
XXIII International Conference Mathematical Optimization Theory and Operations Research 30 Jun - 6 Jul 2024