Computers & Operations Research 33 (2006) 2991 – 3003 www.elsevier.com/locate/cor Bounds for the single source modular capacitated plant location problem Isabel Correia a , ∗ , Maria Eugénia Captivo b a Departamento de Matemática - C.M.A., Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa, Quinta daTorre, 2829-516 Monte da Caparica, Portugal b Universidade de Lisboa, Faculdade de Ciências, Centro de Investigação Operacional Bloco C6, Piso 4, Campo Grande, 1749-016 Lisboa, Portugal Available online 8 April 2005 Abstract In this paper, we propose a discrete location problem, which we call the Single Source Modular Capacitated Location Problem (SS-MCLP). The problem consists of finding the location and capacity of the facilities, to serve a set of customers at a minimum total cost. The demand of each customer must be satisfied by one facility only and the capacities of the open facilities must be chosen from a finite and discrete set of allowable capacities. Because the SS-MCLP is a difficult problem, a lagrangean heuristic, enhanced by tabu search or local search was developed in order to obtain good feasible solutions. When needed, the lower bounds are used in order to evaluate the quality of the feasible solutions. Our method was tested computationally on randomly generated test problems some of which are with large dimensions considering the literature related to this type of problem. The computational results obtained were compared with those provided by the commercial software Cplex.  2005 Elsevier Ltd. All rights reserved. Keywords: Capacitated location; Lagrangean heuristic; Tabu search 0. Introduction Location problems have been widely studied in the last years due to their application in many real situations. In fact, for many companies one of the key strategic decisions is to decide where to build ∗ Corresponding author. Tel.: +351 212948388; fax: +351 212948391. E-mail address: isc@fct.unl.pt (I. Correia). 0305-0548/$ - see front matter  2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.cor.2005.02.030