Modeling international facility location under uncertainty: A review, analysis, and insights

ABSTRACT

In this article, we focus on international facility location models. First, we conduct an extensive literature review on the subject and we propose a classification of the surveyed papers. The classification includes the modeling approach used, international factors, as well as dynamic and stochastic aspects of the approach. Based on the literature review, we find that international facility location problems received little attention. In particular, dynamic facility location models under uncertainty have been hardly studied. Therefore, we develop a stochastic dynamic international facility location model, using a Mixed-Integer Linear Programming (MILP) formulation. Through a case study, we show that international factors, as well as the dynamic and stochastic components of the problem, might influence strategic location decisions. We also quantify the added value of using a stochastic model instead of a deterministic counterpart and we derive insights regarding policies that governments can use to attract investments.

KEYWORDS:

• International facility location
• global supply chain network design
• two-stage stochastic program

Acknowledgements

Two referees are gratefully acknowledged for their detailed and constructive comments that resulted in an improved revised version of the article.

Additional information

Funding

The authors also gratefully acknowledge UAE University for its support to this work through a start-up grant (Grant Code 31B036).

Notes on contributors

Mouna Kchaou Boujelben

Mouna Kchaou Boujelben is an assistant professor in the Department of Business Administration, College of Business and Economics at UAE University. She received her engineering degree in applied mathematics and computer science from ENSIMAG (Ecole Nationale Superieure d'Inforrmatique et de Mathematiques Appliquees de Grenoble) and Ph.D. in Industrial Engineering from Ecole Centrale Paris. Her research interests are in supply chain management, facility location, integer programming, and stochastic programming.

Youssef Boulaksil

Youssef Boulaksil has been Assistant Professor of Operations Management and Logistics at the College of Business and Economics of the United Arab Emirates University since September 2013. Prior to that, he was a faculty member at the School of Business Administration at Al Akhawayn University in Ifrane, Morocco. He holds an M.Sc. in industrial engineering and a Ph.D. in operations management and logistics from the Eindhoven University of Technology, The Netherlands. Youssef has also held visiting appointments at the Nanyang Technological University (Singapore) and the Technical University of Denmark. His research focus is on supply chain planning, stochastic inventory management, and logistics in emerging markets. He has published a number of papers in international journals, such as International Journal of Production Economics, Interfaces, OR Spectrum, and International Journal of Operations and Production Management.