Department of Economics and Business Economics

In this paper, we present an improved cut-and-solve algorithm for the single-source capacitated facility location problem. The algorithm consists of three phases. The first phase strengthens the integer program by a cutting plane algorithm to obtain a tight lower bound. The second phase uses a two-level local branching heuristic to find an upper bound, and if optimality has not yet been established, the third phase uses the cut-and-solve framework to close the optimality gap. Extensive computational results are reported, showing that the proposed algorithm runs 10–80 times faster on average compared to state-of-the-art problem-specific algorithms.