A Fast Tabu Search Algorithm for the Reliable P-Median Problem

Lean distribution networks have been facing an increased exposure to risk of unpredicted disruptions causing significant economic forfeitures. At the same time, the existing literature features very few studies which examine the impact of facility fortification for improving network reliability. In this paper, we present a reliable P-median problem (RPMP) for planning distribution networks against disruptions. We consider heterogeneous facility failure probabilities, one layer of supplier backup, and facility fortification within a finite budget. The RPMP is formulated as nonlinear integer programming model and we develop a Tabu search heuristic that is capable of solving large size problems efficiently.