Neighborhood based heuristics for a two-level hierarchical location problem with modular node capacities

In many telecommunication network architectures a given set of client nodes must be served by different kinds of facility, which provide di fferent services and have diff erent capabilities. Such facilities must be located and dimensioned in the design phase. We tackle a particular location problem in which two sets of facilities, mid level and high level, have to be located. Different devices can be installed in each mid level facility, providing diff erent capacities at di fferent costs. The assignment of clients to facilities and of facilities to higher level entities must be optimized, as well. We propose a heuristic approach, based on very large scale neighborhood search, to tackle the problem, in which both ad-hoc algorithms and general purpose solvers are applied to explore the search space. We report on experimental results using datasets of instances from the literature. These experiments show that the approach is promising and that Integer Linear Programming based neighborhoods are significantly effective.