Constructing refueling stations in the transportation network is one of the most important steps toward the promotion of alternative-fuel vehicles. The capacity of these stations is usually limited. In this paper, a new capacitated refueling station location model and a solution algorithm are proposed. The algorithm is dividedintotwomainsteps.Atfirststep,arestrictedcapacitatedproblemoncoresetsisconstructed.Then,a modified Lagrangean iterative method is used for obtaining solutions. The Lagrangean method decomposes the restricted problem into two subproblems that are easy to solve. Information from subproblems is used to generate valid inequalities for tightening the upper and lower bounds. The approach is evaluated by considering a set of networks and randomly generated instances. The obtained results indicate that the large problems are efficiently tractable by the proposed algorithm in a reasonable time.
