On a two-level allocation problem under restrictions on the size of production (Q2713939)

The author studies a problem about optimal location of factories for some product. It is supposed that the amount of the created product is appointed by the ``producer'' while the ``user'' is responsible for delivery the product to shops and tries to minimize his expenditures. It is necessary to minimize production costs taking the ``user'' reaction into account. The author shows that if the transport expenditures matrix satisfies some ``strong connectedness'' condition then the problem under study can be reduced to the ``nearest neighbor'' problem and, thus, can be solved by dynamic programming methods.