An effective VNS for the capacitated p-median problem

In the capacitated p-median problem (CPMP), a set of n customers is to be partitioned into p disjoint clusters, such that the total dissimilarity within each cluster is minimized subject to constraints on maximum cluster capacity. Dissimilarity of a cluster is the sum of the dissimilarities between each customer who belongs to the cluster and the median associated with the cluster. An effective variable neighbourhood search heuristic for this problem is proposed. The heuristic is characterized by the use of easily computed lower bounds to assess whether undertaking computationally expensive calculation of the worth of moves, within the neighbourhood search, is necessary. The small proportion of moves that need to be assessed fully are then evaluated by an exact solution of a relatively small subproblem. Computational results on five standard sets of benchmark problem instances show that the heuristic finds all the best-known solutions. For one instance, the previously best-known solution is improved, if only marginally.