A facility location model using DEA

In general, facility location problems target at finding the optimal location among a set of candidate facility locations (e.g., plants and warehouses) where the objective is to minimize the total cost of the siting configuration in line with fulfilling the demands. Since facility location decisions normally have significant and long-term impact on the entire supply chain, we require to consider a number of, often conflicting, objectives. In this study, we develop a new facility location model using data envelopment analysis (DEA) with the aim of locating the facility as well as determining its optimal capacity. To validate the proposed model, we prove some theorems and provide an illustrating example.