Hybrid heuristic for dynamic location-allocation on micro-credit territory design

Authors

  • Jesus Fabian Lopez Perez Computer Information Systems & Quantitative Methods, Texas State University
  • Tahir Ekin Computer Information Systems & Quantitative Methods, Texas State University
  • Jesus Jimenez Ingram School of Engineering, Texas State University
  • Francis Mendez Computer Information Systems & Quantitative Methods, Texas State University

DOI:

https://doi.org/10.13053/cys-19-4-2055

Keywords:

Business analytics, territory design, optimization, heuristics, mixed integer programming, large scale problems.

Abstract

This paper presents a two phase mixedinteger program for the commercial territory designproblem of a micro financing institution. After thelocations of the territory centers are determined, thecustomer allocation is done with respect to suchplanning criteria as total workload, amount of loans, andprofit allocation. In order to solve this model for largeinstances, we propose a hybrid heuristic that includesfixing variables, perturbation analysis, and dynamicrelocation of territory centers. We perform acomprehensive statistical analysis that provides novelinsights about the interplay of the heuristics in a largescale mixed integer program. The efficiency of the hybridheuristic is tested and its effectiveness to find nearoptimal solutions with a reasonably small computationaleffort is discussed.

Author Biographies

Jesus Fabian Lopez Perez, Computer Information Systems & Quantitative Methods, Texas State University

Has been a Research Professor atthe Business Development Center of Universidadde Nuevo León (UANL) for the last 15 years. He is a SNI fellow level 1, highest country-widedistinction granted by the Mexican NationalCouncil for Science and Technology. In 2004 heearned a Ph.D. in Management Science honoredwith “Summa Cum Laude”. He has an MBA degreeand an M.Sc. degree in Industrial Engineering fromthe Monterrey Institute of Technology (ITESM). Heis a Certified Analytics Professional (CAP) fromINFORMS in 2015. He also has a CPIM degreefrom the American Production and InventoryControl Society (APICS). He has a B.Sc. degree inComputer Science and in System Engineeringfrom UANL. Nowadays he is a business analyticsconsultant and enthusiastic operations researchpractitioner with more than 25 years of managerialexperience in manufacturing, supply chain, andcommercial optimization in eight differentindustries. He is the author of various articles inindexed journals.

Tahir Ekin, Computer Information Systems & Quantitative Methods, Texas State University

Is an Assistant Professor ofQuantitative Methods at the McCoy College ofBusiness, Texas State University. He holds aPh.D. in Decision Sciences from the GeorgeWashington University and a B.S. in IndustrialEngineering from Bilkent University, Turkey. Hisresearch interests include the areas of simulationbased stochastic programming and statisticalmedical fraud assessment. He is a member of theInstitute for Operations Research and theManagement Sciences (INFORMS) and of theInternational Society for Bayesian Analysis (ISBA).

Jesus Jimenez, Ingram School of Engineering, Texas State University

Received his B.S. and M.S.degrees in Industrial Engineering from theUniversity of Texas, El Paso, and his Ph.D. inIndustrial Engineering from the Arizona StateUniversity, Tempe. He is an Associate Professorwith the Ingram School of Engineering, TexasState University-San Marcos. His researchinterests are in the modeling and analysis ofsemiconductor manufacturing, computersimulation, and sustainable production systems.

Francis Mendez, Computer Information Systems & Quantitative Methods, Texas State University

Is an AssociateProfessor of Statistics. He received his Ph.D. fromRutgers, the State University of New Jersey, in2005. He holds a BBA in Finance, ManagementInformation Systems, and an MBA in QuantitativeMethods from the University of Puerto Rico. Heis currently a member of the American StatisticalAssociation and an Accredited ProfessionalStatistician (PStat®). He has published works inthe Journal of Applied Statistics, Journal of AppliedBusiness and Economics, International Journal ofInformation and Decision Sciences, British Journalof Management, the International Journal ofProductivity and Performance Management, andthe IEEE Transactions in SemiconductorManufacturing among others.

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Published

2015-12-18

Issue

Vol. 19 No. 4 (2015): 19(4) 2015 Thematic issue: Computational Linguistics (Guest editor: A. Gelbukh)

Section

Articles

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