Abstract: Often it requires a lower demand bound to build a service node. Based on this requirement, this paper discusses the interception flow location problem with lower demand bound constraint considered. By presenting a utility function of customer demands, the stochastic distribution characteristics of customer flows is analyzed and the intercepted distribution of the customers of each service node is given. Then, a flow interception location model with lower demand bound constraint is presented by analyzing the operation constraints of the node facility. A case study is given to verify the application of the proposed model. Result shows that, by the estimation and optimization of the lower demand bound and its satisfied probability for each service node, the proposed model can help the stakeholders to solve the location problem and obtain the largest return.

Key words: stochastic demands, interception flow location, intercepted customer flow