Reliable facility location design under set-up cost uncertainty

In this paper, we consider the set-up cost uncertainty in the facility location problem. As the set-up cost highly depend on the price of the property and the price of the raw materials for constructing facilities, the set-up cost became quite unpredictable. So we adopt the scenario method to describe the set-up cost uncertainty. In order to establish a reliable network under different set-up cost scenarios, we propose a mixed-integer programming model and solve it with the tabu search algorithm. Our aim is to get an insight on how relevant a modeling framework considering set-up cost uncertainty may be in facility location problems.