Lagrangean relaxation and decomposition in an uncapacitated 2-hierarchal location-allocation problem (Q1086126)

We consider an uncapacitated 2-hierarchal location-allocation problem where \(p_ 1\) level 1 facilities and \(p_ 2\) level 2 facilities are to be located among n \((\geq p_ 1+p_ 2)\) potential locations so as to minimize the total weighted travel distance to the facilities when \(\theta\), (0\(\leq \theta \leq 1)\) fraction of the demand from a level 1 facility is referred to a level 2 facility. At most one facility may be located at any location. In this model, a level 2 facility provides services in addition to services provided by a level 1 facility. The problem is formulated as a mathematical programming problem, relaxed and solved by a subgradient optimization procedure. The proposed procedure is illustrated with an example.