Locating and staffing service centers under service level constraints

Many firms experience demand from geographically dispersed customers. This demand is satisfied by mobile servers that travel to the site of the customer. To achieve this in a cost-effective manner, the firm needs to decide where to locate its service centers, which customer regions to assign to the centers and the staffing level at each center so that customers experience a defined level of service at minimum cost. To determine adequate staffing levels, we approximate a service center and the customer regions assigned to it as an M/G/s queueing system. Based on this queueing model, we explore properties of two different staffing level functions. The queueing model is embedded in a large-scale integer program. Using the concept of column generation, we develop an algorithm that can efficiently solve moderate-sized problems.