The Capacitated Transshipment Location Problem under Uncertainty

We consider the stochastic capacitated transshipment problem for freight transportation where an optimal location of the transshipment facilities, which minimizes the total cost, must be found. The total cost is given by the sum of the total fixed cost plus the expected minimum total flow cost, when the throughput costs of the facilities are random variables with unknown probability distribution. By applying the asymptotic approximation method derived from the extreme value theory, a deterministic nonlinear model, which belongs to a wide class of Entropy maximizing models, is then obtained. The computational results show a very good performance of this deterministic model when compared to the stochastic one.