Waiting Time Costs in a Bilevel Location-Allocation Problem

We present a two-stage optimization model to solve a location-allocation problem: finding the optimal location of new facilitites and the optimal partition of the consumers. The social planner minimizes the social costs, i.e. the fixed costs plus the waiting time costs, taking into account that the citizens are partitioned in the region according to minimizing the capacity costs plus the distribution costs in the service regions. Theoretical and computational aspects of the location-allocation problem are discussed for the linear city and illustrated with examples.