A Hybrid Approach for CPLP with Multicommodity Flow

We consider a capacitated plant location problem with multi-commodity flow on a two-level network including plants and transshipment points. The objective is to locate plants and determine commodities movement while satisfying customers’ demand and minimizing costs. We present a new and effective hybrid method, composed from Lagrangean Relaxation and UB Creating Method to solve the problem. We introduce some criteria which help us to identify promising open plants. Based on these criteria, UB Creating Method is used to construct feasible solutions from the solutions at the lower bounds obtained by Lagrangean relaxation. The results show that for large size instances, the direct methods are become inefficient and failed to give good solutions in appropriate time; in contrast our method is able to give near-optimal solutions with acceptable runtimes, and optimality gaps are less than 0.70%.