Hierarchical facility location problem: Models, classifications, techniques, and applications

The primary objective in a typical hierarchical facility location problem is to determine the location of facilities in a multi-level network in a way to serve the customers at the lowest level of hierarchy both efficiently (cost minimization objective) and effectively (service availability maximization objective). This paper presents a comprehensive review of over 40years of hierarchical facility location modeling efforts. Published models are classified based on multiple characteristics including the type of flow pattern, service availability, spatial configuration, objective function, coverage, network levels, time element, parameters, facilities, capacity, and real world application. A second classification is also presented on the basis of solution methods adopted to solve various hierarchical facility location problems. The paper finally identifies the gaps in the current literature and suggests directions for future modeling efforts.