A Large-Scale Customer-Facility Network Model for Customer Service Centre Location Applications

We propose a large-scale sparse customer-facility network model that allows a customer to be assigned only to facilities within the vicinity of a customer. In this model, customer-facility distances are integer values representing zones. Experimental results are presented for large instances with up to 100,000 customers and 100 potential facility sites. A mixed-integer linear programming solver reveals large gaps in suboptimal solutions and lower bounds provided, even with a considerable computational effort. Two simple but scalable local search heuristics are computationally investigated, revealing their potential for solving such large-scale problems in practice.