Developing a New Algorithm for a Utility-based Network Design Problem with Elastic Demand

Developing the infrastructures for preventing non-communicable diseases is one of the most important goals of healthcare context in recent years. In this regard, the number and capacity of preventive healthcare facilities as well as assignment of customers to facilities should be determined for each region. Besides the accessibility, the utility of customers is a determinative factor in participation of people in the offered programs. In this paper, a service network design problem is studied such that the utility function is incorporated in the objective function, and the constraints set. The travel distance is deterministic and demand elasticity results in congestion delays. After simplifying the nonlinear model, a bi-level optimization algorithm is proposed to obtain the optimal solution. Computational results assure the efficiency of the developed algorithm. Finally, the capability of the model is represented by discussing a case study of locating preventive healthcare facilities in Yazd, Iran.