LOCATION PROBLEM: AN OVERVIEW

 
 
 
 
 
 
Presented  by:  
Sergio  Alex  Caballero  
Tecnológico  de  Monterrey
 

 Sergio Alex Caballero

* sergio.caballero@itesm.mx
http://megacitylab.mit.edu
 
       
OUTLINE
•  Background & Introduction.
•  Problem definition.
•  Examples & Applications of location theory.
•  Classification scheme for location problems.
•  Major problems in location research.
•  Solution techniques for location problems.

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Background & Introduction
•  First formally introduced in 1909 by Alfred Weber.
•  The problem: locating a single warehouse to minimize the total
travel distance between the warehouse and a set of spatially
distributed customers.
n
minD ( x,y ) = ∑ di x,y
t=1
( )
2 2

d ( x,y ) =
i ( x-ai ) +( x-bi )
•  Since then, considerable research has been carried out in the field of
location theory. A number of different classes of problems have been
identified and solved, and location methodologies have been
extended to a variety of practical applications.

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Problem definition
•  A location problem is a spatial resource allocation problem. In
general, one or more service facilities ("servers") serve a spatially
distributed set of demands ("customers").
•  The objective is to locate facilities to optimize an explicit or implicit
spatially dependent objective.
•  Typical criteria for such decisions include:
–  minimizing average travel time or distance between demands and servers,
–  minimizing average response time (that is, travel time plus any queue delay),
–  minimizing a cost function of travel or response time,
–  minimizing maximum travel time; or maximizing minimum travel time.
•  In general, the objective function consists of terms involving travel
distances (or times) related to facility-facility and/or facility-customer
interactions.
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Examples & Applications of location theory (Cont.)
•  Examples of typical location problems:
–  Network Design. A city is faced with the problem
of designing a water treatment network. Untreated
water emanates from a number of different
sources in the city. A central water treatment
facility is to be located to minimize the total length
of piping needed to conduct the untreated water to
the treatment facility.
–  Warehouse Location. A firm wants to locate an
undetermined number of warehouses in a region
to serve a number of customers. Associated with
each warehouse is a fixed investment cost, a
distribution cost per unit of demand satisfied, and
possibly a capacity constraint. The firm wishes to
minimize its total warehouse cost.

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Examples & Applications of location theory (Cont.)
–  Fire Box Coverage. A fire department wants to
locate a fixed number of fire boxes in its service
area with the objective of minimizing the maximum
distance that any citizen must travel to the nearest
fire box.

–  Competitive Facility Location. A firm wants to

introduce a new store in an area already served
by competing firms. Customers in the area have
exhibited a certain level of demand for the product
or service, but the demand could increase if a new
store were added. The firm's objective is to locate
its new store to yield maximum profit or market
share.

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Examples & Applications of location theory (Cont.)
•  Applications of location theory:

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Examples & Applications of location theory (Cont.)

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Classification scheme for location problems
•  Although location theory encompasses a wide range of problems, they
all share certain common elements.
•  As a preliminary, a model of any problem must consist of:
–  an objective (optimizing or non-optimizing),
–  decision variable(s);
–  and system parameters.
•  To distinguish between different location models, a "menu" of choices
within each of these categories has been created. By selecting
appropriate entries from each category, any location problem/model
can be specified.

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Classification scheme for location problems (Cont.)

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Classification scheme for location problems (Cont.)

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Classification scheme for location problems (Cont.)

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Classification scheme for location problems (Cont.)

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Major problems in location research
•  1. Minimization of average travel time/average cost or maximization of
net income.
–  The objective of the p-median problem on a general network (P1) is to
locate p servers to minimize average weighted or unweighted travel
distance between servers and demand points. Most formulations assume
demands at a finite number of points. The continuous median problem on
a network allows demands to be continuously distributed over the links.
–  Another version of this problem is a median problem with uncertainty
(P2) in which demands and/or travel times on the network are random
variables.
–  Other authors have considered a mobile server location problem on a
stochastic network (P3) in which one or more servers are to be located
and can be moved at a cost in response to changes in relative travel
times.
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Major problems in location research (Cont.)
–  The objective of the Lp norm network location problem (P4) is to
locate a single server on a network to minimize average travel cost, but
unlike the 1-median problem, the sum of (weighted or unweighted)
distances is measured by an Lp metric .
–  For the m-facility minisum problem with mutual communication
(P5), the objective is to locate m servers on a tree network to minimize
the weighted sums of distances between facilities and demand points
plus a weighted sum of inter-facility distances subject to inter-facility and
facility-demand point distance constraints.
–  The simplest planar minisum problem is the Weber problem (P6), which
assumes that a single server is to be located to respond to a set of
discrete demands to minimize travel cost.

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Major problems in location research (Cont.)
–  The generalized Weber problem (P7), also referred to as the
warehouse location problem or the location-allocation problem, is to
locate a set of m servers in a plane with discrete demands, and to
simultaneously determine service areas for those servers in order to
minimize travel or service cost. Distances may be measured by a
rectilinear norm, a Euclidean norm, an Lp norm, or a hyper-rectilinear
norm).
–  The simple plant location problem (P8) is a particular version of the
warehouse location problem which seeks to select an undetermined
number of facility locations from a finite number of potential locations to
minimize fixed setup cost plus variable service cost; facilities are
assumed to have no capacity constraint.

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Major problems in location research (Cont.)
–  The capacitated plant location problem (P9) is a version of P8 which
incorporates capacity restrictions on the servers; when only some
servers have capacity restrictions, the problem is sometimes referred to
as a mixed plant location problem.
–  There is also a class of dynamic warehouse location problems (P10)
which pose the question of how to locate warehouses over time in
response to changing demand patterns so as to minimize total long-run
cost.
–  The above versions of the warehouse location problem assume that a single
commodity is being handled. The multi-commodity service facility
location problem (P11) is an extension of the simple plant location problem
in which a number of different commodities must be handled, and each service
facility can handle only one type.

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Major problems in location research (Cont.)

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Major problems in location research (Cont.)

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Major problems in location research (Cont.)

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Major problems in location research (Cont.)
•  2. Minimization of average response time.
–  Some location problems include queueing effects in the objective
function. In the stochastic loss median problem (P22) a single facility
is to be located on a general network to minimize a weighted function of
travel cost and opportunity cost of lost customers.
–  The stochastic queue median problem (P23) assumes that a single
server with infinite queue capacity is to be located on a general network
to minimize average response time.

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Major problems in location research (Cont.)
•  3. Minimization of maximum travel time/cost.
–  The objective of the p-center problem (or absolute p-center problem)
(P24) is to locate p servers on a general network to minimize maximum
(weighted or unweighted) distance between a set of discrete demand
points and the servers.
–  When server locations are limited to nodes of the network, the problem is
the vertex-constrained p-center problem (P25).
–  The planar version of (P24) is the p-facility minimax problem or
planar minimax problem (P26). For this problem, distances may be
measured by a rectilinear metric, a Euclidean metric, or an Lp metric, or a
block norm, and may be weighted or unweighted.
–  The unreliable p-center problem (P27) is a planar minimax problem
which includes the possibility that up to q servers may fail at any one
time.
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Major problems in location research (Cont.)

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Major problems in location research (Cont.)

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Major problems in location research (Cont.)
•  4. Minimization of maximum response time.
–  Analogous to the p-center problem is the stochastic queue center
problem (P36), which has the objective of minimizing maximum
expected response time to any demand point (that is, expected queue
delay plus maximum travel time to any call).

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Major problems in location research (Cont.)
•  5. Maximization of minimum or average travel time/cost.
–  The objective of the obnoxious facility problem (or antimedian
problem) (P37) is to locate a single server on a network to maximize
average (weighted or unweighted) travel distance between the server
and a set of discrete demand points.
–  The objective of the distant point problem (or anticenter problem)
(P38) is to maximize minimum (weighted or unweighted) distance
between the server and demand points.
–  For the p-dispersion problem (or anti-covering problem) (P39) the
objective is to locate p facilities on a network to maximize the minimum
distance between any pair of facilities.

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Major problems in location research (Cont.)

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Major problems in location research (Cont.)
•  6. Problems with other objectives.
–  Many location problems based on multiple objectives, nonoptimizing
objectives, or other less traditional objectives do not fit into the above
groupings.

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Major problems in location research (Cont.)

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Solution techniques for location problems
•  A variety of different exact and heuristic solution approaches have
been developed to solve location problems.

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References
•  Brandeau, M. L., & Chiu, S. S. (1989) An overview of representative
problems in location research. Management science, 35(6), 645 – 674.

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 Thanks!
Questions & Comments?
sergio.caballero@itesm.mx

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