The Stochastic Quasi-Gradient Method Applied to a Facility Location Problem

This paper explores the computational aspects of using the stochastic quasi-gradient method (SQG) to solve some facility location problems. The problems addressed belong to a general class of resource allocation problems with random demand. An algorithm is first developed for the simplest formulation, where a convex objective function is minimized, and results are shown for the location of high schools in Turin, Italy. Fixed charges are then introduced in the objective function, giving rise to a non-convex problem possessing many local minima, and some numerical results for the same case study are reported