Service System Design with Immobile Servers, Stochastic Demand and Economies of Scale
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Date
2015-05-26
Authors
Wang, Yan
Journal Title
Journal ISSN
Volume Title
Publisher
University of Waterloo
Abstract
The service system design problem seeks to locate facilities, determine their capacity,
and assign customers to them in order to improve the service quality and the customers'
experience while minimizing the capacity acquisition cost, the customer access cost, and
the average waiting cost. While the centralization of facilities will lead to economies of
scale, decentralizing them will lead to faster response times. Traditionally, the capacity
acquisition costs were assumed linear with a xed setup cost. In this work, we explicitly
account for economies of scale by modeling the cost as a concave function of capacity.
In this thesis, we model and provide solution methodologies for the service system
design problem with immobile servers, stochastic demand and economies of scale. We
start by reformulating the problem, and then provide solution approaches based on piece-wise linearization, Second Order Cone Programming (SOCP), and Lagrangian Relaxation.Extensive numerical testing on a standard data set is provided and the results analyzed.
Description
Keywords
Service System Design, Immobile Servers, Stochastic Demand, Economies of Scale