A bilevel partial interdiction problem with capacitated facilities and demand outsourcing

• Published in: Computers & operations research Vol. 41; pp. 346 - 358
• Main Authors: Aksen, Deniz, Şengül Akca, Sema, Aras, Necati
• Format: Journal Article
• Language: English
• Published: New York Elsevier Ltd 01.01.2014; Pergamon Press Inc
• Subjects: Bilevel programming; Budgeting; Decisions; Demand; Game theory; Mathematical models; Mathematical problems; Mathematical programming; Networks; Operations research; Outsourcing; Partial facility interdiction; Search methods; Searching; Simplex search; Studies; Simplex search; Bilevel programming; Outsourcing; Partial facility interdiction
• ISSN: 0305-0548; 1873-765X; 0305-0548
• DOI: 10.1016/j.cor.2012.08.013

In this paper, partial facility interdiction decisions are integrated for the first time into a median type network interdiction problem with capacitated facilities and outsourcing option. The problem is modeled as a static Stackelberg game between an intelligent attacker and a defender. The attacker's (leader's) objective is to cause the maximum (worst-case) disruption in an existing service network subject to an interdiction budget. On the other hand, the defender (follower) is responsible for satisfying the demand of all customers while minimizing the total demand-weighted transportation and outsourcing cost in the wake of the worst-case attack. She should consider the capacity reduction at the interdicted facilities where the number of interdictions cannot be known a priori, but depends on the attacker's budget allocation. We propose two different methods to solve this bilevel programming problem. The first one is a progressive grid search which is not viable on large sized instances. The second one is a multi-start simplex search heuristic developed to overcome the exponential time complexity of the first method. We also use an exhaustive search method to solve all combinations of full interdiction to assess the advantage of partial interdiction for the attacker. The test results suggest that under the partial interdiction approach the attacker can achieve a better utilization of his limited resources. [Display omitted] A bilevel partial interdiction problem with capacitated facilities and demand outsourcing ► We investigate a bilevel facility interdiction problem between an attacker and defender, where the attacker is the leader who wants to cause the most disruption in a median type network and the defender tries to assign customer demand to the facilities according to the remaining capacities and outsource the unmet demand with a penalty. ► Partial interdiction is possible where a partially interdicted facility loses some of its capacity in proportion to the attack level. ► Two solution methods are proposed. The first is a progressive grid search heuristic that can be applied for instances with up to 10 facilities. The second is a multi-start revised simplex search procedure. Both of the heuristics call Cplex to optimally solve an integer programming model in the lower level problem. ► We evaluate the benefit of the partial interdiction approach over full interdiction from the attacker’s point of view.