European Journal of Operational Research 165 (2005) 1–19

www.elsevier.com/locate/dsw

Invited Review

Location analysis: A synthesis and survey

a,* b
C.S. ReVelle , H.A. Eiselt
a
Department of Geography and Environmental Engineering, The Johns Hopkins University, 313 Ames Hall, 3400 N. Charles Street,
Baltimore, MD 21218-2681, USA
b
University of New Brunswick, Fredericton, NB, Canada
Received 15 January 2003; accepted 17 November 2003
Available online 4 June 2004

Abstract

The mathematical science of facility siting has attracted much research in discrete and continuous optimization over
nearly four decades. Investigators have focused on both algorithms and formulations in diverse settings in the private
sector (e.g., industrial plants, banks, retail facilities, etc.), and the public sector (e.g., ambulances, clinics, etc.). Each
formulation has differences and similarities relative to the others, but the peculiarities of each problem provide the fuel
for the hundreds of investigations. The presence of non-linearities and requirements for zero–one variables head the list
of challenges that have occupied researchers in this active and expanding field. We review here the many facets of this
exciting and centrally placed field through reference to both seminal works and current reviews.

2004 Elsevier B.V. All rights reserved.

Keywords: Facility location; Siting models; Survey; Network location; Continuous location

1. Introduction layout problems, in contrast, the facilities to be

The term Location Analysis refers to the
modeling, formulation, and solution of a class of
problems that can best be described as siting
facilities in some given space. The expressions
deployment, positioning, and siting are frequently
used as synonyms. We distinguish between loca-
tion and layout problems by noting that the
facilities in location analysis are small relative to
the space in which they are sited and interaction
between the facilities may or may not occur. In
*
Corresponding author. Tel.: +1-410-516-7095; fax: +1-410-
516-8996.
E-mail address: revelle@jhu.edu (C.S. ReVelle).
located are fairly large relative to the space in
which they are positioned, and interaction between
facilities is the norm rather than an exception. The
bibliography by Domschke and Drexl (1985) lists
more than 1500 references dealing with location
and layout problems, and many more contribu-
tions have appeared since then. There are four
components that characterize location problems;
these are (1) customers, who are presumed to be
already located at points or on routes, (2) facilities
that will be located, (3) a space in which customers
and facilities are located, and (4) a metric that
indicates distances or times between customers
and facilities. Applications of location problems
abound: they range from gas stations and fast food
outlets to landfills and power plants.

0377-2217/$ - see front matter
2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.ejor.2003.11.032
2 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
In some non-traditional location problems such
as product positioning, each facility represents a
product, which is mapped into a feature space, each
of whose dimensions represents a relevant feature
of the product. Similarly, each customer (or, typi-
cally, group of customers) is mapped into the fea-
ture space, and the distance between customers and
products will give an indication which products the
customers are going the purchase, thus allowing
estimates concerning the sales of the products. A
similar example from political sciences deals with
the optimal positioning of candidates for office; for
details see Niemi and Weisberg (1976). A survey of
many distinct applications of location models is
provided by Eiselt (1992), ranging from traditional
applications involving newspaper transfer points
(Jacobsen and Madsen, 1980), solid waste transfer
points (Marks and Liebman, 1971; Wirasinghe and
Waters, 1983), bank branches (Hopmans, 1986),
and motels (Kimes and Fitzsimmons, 1990) to the
more unusual location problems such as the loca-
tion of a church camp (Huxley, 1982), the deter-
mination of apparel sizes (Tryfos, 1986), ingot sizes
(Vasko et al., 1987), and the location of rain gauges
(Hogan, 1990). For a list of new location appli-
cations, readers are referred to Current et al.
(2002).
Whereas routing problems are typically found
on the lower end of the strategic–tactical–opera-
tional continuum (meaning that they are typically
reasonably well defined and measurable), location
problems are likely to have multiple objectives;
fuzzy and ill-posed, making it much harder for the
analyst to model them. One approach that appears
to be promising is the use of tools from decision
analysis; see, e.g., Rey et al. (1995), who use the
ELECTRE outranking method to arrive at a
solution that reconciles the many different criteria
included in the problem.
2. The space of location decisions
Location scientists often use the space in which
facilities are located to distinguish between classes
of location problems. We distinguish between
location problems in d-dimensional real space jd
and network location problems, each of which can
be further subdivided into continuous or discrete
location problems. Distances in jd are most often
derived from Minkowski distances, which are de-
fined as a family of distances with a single
parameter p. In particular, the ‘p distance between
a point (ai , bi ) and a point (aj , bj ) with i 6¼ j is
defined as
dijp ¼ ½j ai
aj jp þ j bi
bj jp 1=p :
A large part of the literature focuses on three
special cases: for p ¼ 1, we obtain the rectilinear
(or rectangular or Manhattan or ‘1 ) distance
dij ¼j ai
aj j þ j bi
bj j, the Euclidean (or
straight line or ‘2 ) metric with
qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
dij2 ¼ ðai
aj Þ2 þ ðbi
bj Þ2 ;
and the Chebyshev (or ‘‘max’’, or ‘1 ) metric with
dij1 ¼ maxfj ai
aj j; j bi
bj jg:
Other functions such as gauges have been sug-
gested by various researchers; see, e.g., Plastria
(1995).
For the estimation of road distances between
points based purely on the coordinates of the
endpoints, Love and his co-researchers have
worked with a number of additional metrics, see,
for instance, the text by Love et al. (1988) or
Brimberg and Love (1995). The main reason for
calculating distances between points whenever
needed rather than storing them is the sharply
decreased need for storage space: the coordinates
of n given points require OðnÞ storage space, while
all point-to-point distances require Oðn2 Þ memory.
One of their main results is the recommendation
of a weighted ‘p distance function for practical
problems.
In contrast, distances in network location
problems are measured on the network itself,
typically as the shortest route on the network of
arcs connecting the two points. Using the shortest
path usually requires a preprocessing phase to find
all shortest paths between all relevant pairs of
points, typically a Dijkstra (1959) based O(n3 )
algorithm. Both planar problems and network
problems can be further subdivided into continu-
ous and discrete location problems. In continuous
problems, the points to be sited can generally be
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
placed anywhere on the plane or on the network.
An example of a continuous location problem in
the plane might be the placement of a helicopter
for trauma pickup, while the location of an
ambulance or a tow truck along a stretch of
highway is a typical application of a continuous
problem on a network. In discrete problems, in
addition to the points to be positioned, the facili-
ties can conceptually be placed only at a limited
number of eligible points on the plane or network.
Thus, discrete location models have gone through
an additional preprocessing phase that has pre-
selected candidate sites at which the facilities may
be sited. An example of a discrete location prob-
lem in the plane is the positioning of transmitter
stations that are to be placed at some permissible
points within a region, such as mountaintops,
while an application of discrete network location
problems is found in the location of retail facilities
that can only be sited on lots that are zoned for
them.
A result of the above discussion is that, typi-
cally, continuous location problems, which are for
the most part planar problems, tend to be non-
linear optimization problems, while discrete loca-
tion problems, which most often are network
problems, involve zero–one variables that result in
integer programming/combinatorial optimization
problems. Clearly, there are countless hybrid
models, many of which do not fall into these neat
categories.
3. Classes of location objectives
A variety of factors other than customers,
facilities, space, and distance functions play
important roles in location modeling. One such
factor is the objective that is employed by the
decision maker. Traditionally, the facilities that
were to be located were assumed to be desirable in
the sense that the closer they are to the customers,
the better the value of the objective function. As
Eiselt and Laporte (1995) pointed out, these are
fall into the category of ‘‘pull’’ objectives. Gab-
zewicz and Thisse (1989) have derived two of the
three main ‘‘pull’’ objectives from a general profit
function. Suppose that a firm has decided to locate
3
n new facilities as a fixed cost of cf each. At the ith
facility, they will charge a price pi , at which the
demand is di ðÞ, where  denotes a variety of fac-
tors that determine the price. Let tij denote the unit
transportation cost, and let cv denote the variable
production cost (which, for simplicity, is assumed
to be equal at all sites). Defining variables xij that
denote the proportion of the demand at demand
point i that is satisfied at the facility at point j, we
can write the firm’s profit as
X X
P¼ pi di ðÞ
cf n
cv di ðÞ
i i
X X

di ðÞ tij xij :
i j
The first term is the revenue, the second describes
the fixed location costs, the third denote the vari-
ables production costs, and the last term expresses
the transportation costs. Consider now two pricing
policies. Suppose that the firm uses mill pricing.
This means that the transportation costs are borne
by the customers, so that the last term in the above
profit function vanishes. For any given number of
facilities n and given set of prices
pi , the first two
terms are a constant, so that the maximization
P
P is equivalent with minimizing cv i di ðÞ ¼
of P
cv i di ðpi þ minj ftij gÞ, assuming that the cus-
tomers purchase from the facility that quotes the
lowest full price, defined as the purchase price plus
the transportation costs. It becomes apparent that
a firm that applies mill pricing will attempt to
maximize the demand that it satisfies. This type of
problem was first mentioned by ReVelle (1986),
who referred to it as capture problem. Consider
now the case, in which the firm decides to pursue a
policy of delivered pricing, i.e., it will pay for the
transportation costs which it includes in the prices.
As a result, customer demand is now di ðpi Þ, and for
fixed n and
pi , the profit function reduces P to the
minimization of the transportation costs j wi tij xij
with weights wi ¼ di ðpi Þ. A point that minimizes
transportation costs is typically referred to as
median in a network setting (or sometimes as
points of production or of distribution), while such
a point is generally called a Weber point in planar-
continuous models. The latter name is in honor of
the German economist Alfred Weber (1909) who
worked on these problems at the beginning of the
4 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
20th century and summarized his findings in his
classical treatise; for a summary see Wesolowsky
(1993). Another important pull objective, one that
cannot be derived from the above general profit
maximization function, are so-called center prob-
lems, whose objective is to minimize the largest
customer-facility distance.
Since the late 1970s, researchers have also
considered the location of noxious or obnoxious
(or simply undesirable) facilities, see, for instance,
Erkut and Newman (1989). In contrast to facilities
where nearness is desirable, customers wish, as one
of their objectives, to ‘‘push’’ undesirable facilities
as far from them as possible. By themselves and
without any further restrictions, ‘‘push’’ objectives
will attempt to locate towards infinity. This is why
they are often coupled with other, predominantly
‘‘pull’’, objectives. An example of a problem with
these two conflicting objectives is the location of a
sanitary landfill, a facility most people would
consider undesirable. The customers of the landfill
and the general population would prefer to push
the landfill as much away from them as possible,
while, in an attempt to minimize costs, the com-
pany in charge of the garbage collection will at-
tempt to locate as close to those who generate the
garbage as possible. (A closer examination will, of
course, reveal that, since the public is ultimately
paying for the service, one the public’s objectives is
also of the ‘‘pull type’’.) Any solution to the
problem will ultimately require explicit or implicit
information about the tradeoffs of the objectives
involved.
Finally, a third class of objectives is the
achievement of equity. Models with such objec-
tives attempt to locate the facilities, so that the
customer-to-facility distances may be as similar to
each other as possible. This equalization gives rise
to the term ‘‘balancing objectives’’. Alternatively,
the distances from clients to the nearest facility
may be bounded by some generally recognized
distance standard. Where the standard is an upper
bound, this is done so as to provide relatively
equal access to a desirable facility, or, equivalently
in the case of undesirable facilities, where the
standard is a lower bound on the separation dis-
tance, the standard is imposed to distribute the
unpleasantness as equally as possible.
Other features of interest to the modeler include
the number of facilities that are to be located. The
simplest of the models attempt to locate a single
facility, whereas more complex models might
locate p facilities, where the parameter p may
be fixed by the decision maker or imposed by a
budget limitation. Alternatively, the number of
facilities may be unknown at the outset and
determined endogenously through the elements of
the model’s objective. The best-known in this
category of models with ‘‘free entry’’ is the plant
location problem that minimizes the sum of plant
opening costs and distribution costs, and allows
the number of facilities to be an output or conse-
quence of the minimum cost solution. Another
type of model in this category is the location set
covering model first introduced by Toregas et al.
(1971). The idea is to find the least number of
facilities so that all demand points are covered
within a prespecified distance standard.
Other enhancements of location models include
uncertainty or risk with respect to the ability to
service demands within desirable distances.
Sometimes, barriers may exist that cannot be
crossed in continuous location models. As well
there is a category of facilities referred to as
‘‘extensive facilities’’ that cannot be modeled as
points but have length as well as position charac-
teristics, thus providing a link between location
models, layout models, and network models.
An early characterization of model forms and
objectives that is still in use was provided by
ReVelle et al. (1970) in which location problems
were divided into private sector problems and
public sector problems. The private sector prob-
lems seek the sites for plants and or warehouses;
these sites are those that optimize some function of
the monetary value associated with the location. In
contrast, public sector problems seek facility sites
that optimize the population’s access (measured in
the various ways discussed above) to those facili-
ties. Clearly, there are many shades of gray be-
tween the extremes of ‘‘private’’ and ‘‘public’’.
Consider, for instance, a decision maker in the
public sector who accepts the measure of the
average customer-facility distance as a proxy for
accessibility. The resulting model minimizes the
sum of distances, i.e., a minisum objective that is
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
most often associated with cost-minimization in
the private sector. Typically, defining objectives in
public sector models is much more complicated
than in the private sector. Most often, the private
sector maximizes profits or minimizes costs,
whereas the public sector objectives are less tan-
gible. For instance, whether a public decision
maker who attempts to maximize accessibility of
the facility in question will choose to minimize the
average distance or the longest distance between
the facility and any of its customers is a matter of
opinion. While Rawls (1971) made a case for
minimax objectives, Harsanyi (1975) demonstrated
the desirability of minisum objectives. Here, the
concept of multiple objectives may well apply, and
the tradeoff between average and maximum dis-
tance developed and displayed. Whichever objec-
tive may be chosen, the difficulty of measurement,
particularly in public decision making, remains.
4. Location problems in the plane
Minisum planar location problems dominated
the location discussion until the mid-1960s. Al-
though those with a bent for history will argue
over firsts (see, e.g., Drezner et al., 2002), appar-
ently the first location problem in the literature is
due to the mathematician Torricelli (1608–1647).
His problem involves three customers and one
facility, with the task being the minimization of the
sum of Euclidean distances between the customers
and the facility. Torricelli determined that the
facility would be located at a point, such that
the angles formed by the lines that connected the
facility and any two of its customers are 120. This
result applies as long as the angle formed at each
customer location by connecting it to the other
two customer points, is no larger than 120. If any
one of these angles exceeds 120, the optimal
location coincides with that point. From the
beginning of the 20th century until the 1960s,
economists, geographers and regional scientists
dominated the field. Their models tended to be
either geometric or exhaustive computational
methods to locate facilities in the 2-dimensional
plane. The earliest and, arguably, most prominent
example is Weber’s (1909) seminal work. The
5
earliest true location algorithm was offered by the
mathematician Weiszfeld (1937). He solved a
minisum planar problem with one facility and
Euclidean distances. His algorithm was written in
French and published in a Japanese journal of
mathematics, thus eluding detection by other
authors, resulting in the rediscovery of the algo-
rithm by Miehle (1958), Kuhn and Kuenne (1962),
and Cooper. His main ideas are as follows.
The objective function of the two-variable
model (the only variables are the two coordinates
of the new facility) is
X X qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
Min z ¼ di wi ¼ wi ðai
xÞ2 þ ðbi
yÞ2 ;
i2I i2I
where customers are located at ðai , bi Þ, the facility
is to be sited at ðx; yÞ, wi is the known demand (or
weight) of customer i; and I is the set of customers.
This non-linear function can be differentiated,
resulting in two non-linear equations which are set
equal to zero, but for which no closed form solu-
tion exists. The first-order conditions are first
written in the form
P wi ai
i2I qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
2
ðai
xÞw2i þ ðbi
yÞ
x¼P wi ;
i2I qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
ðai
xÞw2i þ ðbi
yÞ2
with a similar equation for y. A clever iterative
technique then uses a present guess of ðx; yÞ for x
and y on the right-hand side of the equation, and
calculates new values ðx; yÞ for the two variables
on the left-hand side, which are then used again as
input in the next iteration. It must be observed,
though, that the objective function is not differ-
entiable everywhere, as the derivative does not
exist at the demand points. Eyster et al. (1973)
have proposed a remedy called hyperbolic
approximation, a technique based on perturba-
tions. With or without approximation, the com-
putational scheme, which often begins with the
centroid as a starting point, tends to converge
quickly. However, Drezner (1992) reports very
slow convergence for some problems; in fact, a 4-
node problem failed to converge in 100,000 itera-
tions. Kuhn (1973) was the first to point out that
there may be local optima at demand points.
6 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
Drezner and Simchi-Levi (1992) showed that for
single-facility problems with equal weights and
demand points being randomly distributed on a
disc, the likelihood of a demand point being
optimal is 1=n, with n being the number of demand
points. Furthermore, they demonstrated that the
expected deviation of the objective value at the
least-cost demand point from the true optimum is
3=n.
In contrast, when the objective of the minimum
weighted squared distances is differentiated with
respect to the x and y coordinates of the facility,
the resulting equations are separable and a simple
closed-form solution exists, in which
P P
wi ai w i bi

x ¼ Pi and
y ¼ Pi ; istics (such as waiting times) are all the same, and
i wi i wi
providing the well-known center-of-gravity (also
known as the centroid) of the given demand
points. For an excellent exposition of the history
of continuous problems on the plane, readers are
referred to Wesolowsky (1993). Another recent
reference on planar location is due to Drezner
et al. (2002). Similarly, the single-facility location
problem in the plane using the sum of rectilinear
distances also has a separable objective function
and can be solved easily by a simple search as
pointed out by Vergin and Rogers (1967).
As far as center problems (or minimax distance
problems) are concerned, the model with Eucli-
dean distances is typically solved by either the
approach of Elzinga and Hearn (1972), or, more
efficiently, by methods from computational
geometry, involving farthest-point Voronoi dia-
grams. For an early, but excellent reference, see
Shamos and Hoey (1975). Elzinga and Hearn have
also shown that the 1-center problem in the plane
with rectilinear distances has a remarkable closed-
form solution that results from the reduction of a
large linear programming formulation. The prob-
lem begins with a number of constraints equal to
four times the number of demand points and re-
duces by dominance to just four constraints that
can be solved graphically.
As is the case in all multi-facility location
problems, the solution of planar location problems
with multiple facilities requires not only the siting
of facilities but also the allocation of customers to
those facilities. Here, we typically distinguish be-
tween customer choice (or user-attracting) models,
and allocation models (or delivery systems). In
customer choice, the customers decide which
facility to patronize; a system typically appropriate
in the retail sector. On the other hand, allocation
models are appropriate when the facility planner is
also in charge of deciding which facility supplies a
given customer. It is quite natural in allocation
models that customers are allocated to their closest
facility (except in capacitated models). However,
many customer choice models also allocate cus-
tomers to their closest facility. Such assumption
makes sense only if (1) customers engage in sepa-
rate trips to the facility, (2) the facility character-
(3) customers are rational (i.e., utility maximizing)
planners with utility functions that include only
transportation costs, which are assumed to be
proportional to customer-facility distances. Pre-
suming these assumptions are satisfied, we can
define a set J of facility locations, where the point
ðxj ; yj Þ is the location of the jth facility for all j 2 J .
Defining uij as the proportion of customer i’s de-
mand that is served by the jth facility, the multi-
facility location problem can then be written as
XX
Min z ¼ wi dij uij ;
i2I j2J
X
s:t: uij ¼ 1 8i 2 I;
j2J
uij 2 j8i 2 I; j 2 J ;
xi ; yj 2 j8j 2 J ;
where the variables xj and yj , j 2 J appear only
implicitly in the formulation in the guise of the
distances dij .
Except for the case of rectilinear distances,
where the formulation can be solved by a linear
programming problem, the problem is NP-hard
for most distance functions. Hence, most exact
algorithms can only solve problems of moderate
size. One interesting approach that uses set parti-
tioning and a form of column generation is due to
Rosing (1992). His method first enumerates all
feasible partitions of the customers, solving within
each of these subsets of customers a single-facility
problem. The outputs of these subproblems supply
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
the parameters of the larger problem which is
solved as a set partitioning problem. As the num-
ber of partitions is exponential in the number of
customers, the approach is probably best used as a
heuristic by simply considering only a subset of
potentially promising or spatially reasonable par-
titions of customers. Such spatially reasonable
partitions are easy ‘‘to see’’, because clusters that
include spatially disjoint sets of demand areas are
unlikely to be in the same partition. A well-known
heuristic is Cooper’s (1963) ‘‘alternate’’ method for
location–allocation. The algorithm switches back
and forth between a siting phase and a re-alloca-
tion phase. Many other heuristics exist, including
greedy methods and genetic algorithms. Multi-
facility minimax problems frequently use exten-
sions of the Elzinga–Hearn procedure mentioned
above.
5. Location problems on networks
Although a few papers on network-based plant
and warehouse location appeared in the opera-
tions research literature in the 1950s, serious
attention to network-based problems waited until
the middle 1960s. Hakimi (1964, 1965) in a pair of
seminal papers investigated the minimum weighted
distance location of p facilities on a network of n
demand nodes, a problem class he termed the p-
median problem. Though he did not provide a
solution method for the p-median problem, he
proved the existence of at least one optimal solu-
tion which has all p facilities located solely at the
nodes of the network. His contribution was similar
to that of Dantzig for linear programming, in that
it reduced the set of optimal solutions from a
potentially infinite set to a finite (albeit astro-
nomically finite) set. This result is commonly re-
ferred to as the ‘‘Hakimi theorem’’ or ‘‘the node
property’’.
Goldman (1971) showed that 1-median prob-
lems on trees have very simple properties some-
what reminiscent of single-Weber problems with ‘1
distances (a result that was independently derived
by Hua Lo-Keng et al. (1962)). He also showed
that 1-median problems on general graphs can be
solved by a brute-force search in O(n3 ) time. One
7
remarkable result from his study was that when-
ever one of the demand points had more than half
the total system weight, the optimal solution
placed the facility at that point. This result is
remarkably similar to the optimality conditions for
medians in 2-dimensional space with ‘1 distances.
However, no such results are available for the
general p-median problem. In fact, Kariv and
Hakimi (1979b) demonstrated that the general p-
median problem is NP-hard. Nonetheless, invok-
ing Hakimi’s theorem, we know that it is sufficient
to search for the optimal solution on the set of
nodes. Using this result, ReVelle and Swain (1970)
were the first to formulate the p-median as a zero-
one programming problem. A variant of their
original formulation is
XX
Min z ¼ wi dij xij ; ð1Þ
i2I j2J
s:t:
X
xij ¼ 1 8i 2 I; ð2Þ
j2J
xij 6 yj 8i 2 I; j 2 J ; ð3Þ
X
yj ¼ p; ð4Þ
j2J
xij ¼ 0 _ 1 8i 2 I; j 2 J ; ð5Þ
yi ¼ 0 _ 1 8j 2 J ; ð6Þ
where the locational variables yj are one, if a
facility is located at node j and zero otherwise. The
allocation variables xij denote the proportion of
the demand of the customer at node i that is as-
signed to a facility at node j. Finally, p denotes the
number of facilities that are to be located; the
remaining parameters are as defined above. To be
sure that the optimal solution is truly found re-
quires that the set of facility nodes include not only
demand nodes but also ‘‘empty nodes’’, i.e., nodes
without demand that are simply network inter-
section points. These network intersection points
would not, however, be included in the set of de-
mand nodes I as they do not require assignment.
It should be noted that it is sufficient to require
that xij P 0 8i 2 I, j 2 J rather the zero–one con-
straints (5), as there is at least one solution in
which the allocation variables are zero–one. It is
also worth mentioning that the jIjjJ j constraints
8 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
(3) can be aggregated to jJ j constraints of the type
P tions and the true optimal increased as well with
i2I xij 6 Myj 8j 2 J , where M is a number no
smaller than n
p þ 1. However, as typical in
integer programming, such aggregated formula-
tions would be expected to increase the solution
time dramatically because of the fractions intro-
duced to the LP optimum and the subsequent need
for branch and bound.
Among the exact algorithms is a procedure due
to Galv~ ao (1993) that employs Lagrangean relax-
ation and the linear programming relaxation of
ReVelle and Swain (1970). It is also possible to
apply iteratively the dual descent techniques
developed for the plant location problem by Bilde
and Krarup (1977) as well as Erlenkotter’s (1978)
‘‘dualoc’’ procedure. For an insightful description,
readers are referred to Daskin (1995). Among
traditional heuristic methods applied to the p-
median problem is the location–allocation heuristic
of Maranzana (1964), which is actually a co-tem-
poraneous nodal version of Cooper’s ‘‘alternate’’
method mentioned above. Another of the older
but widely known heuristics is the more powerful
vertex substitution technique of Teitz and Bart
(1968), one of the earliest of the heuristics known
as ‘‘1-opt’’ for the number of items being simul-
taneously exchanged. The simplex procedure is a
1-opt and leads to an optimal solution always,
because the solution space is convex. However, the
Teitz and Bart procedure does not always con-
verge to the global optimum because the solution
space of the p-median is not necessarily convex. A
speedier recent adaptation of the exchange heur-
istic is due to Densham and Rushton (1992). Ro-
sing and ReVelle (1997) incorporated the exchange
heuristic in a metaheuristic, known as heuristic
concentration, which, to date, has performed well,
even against tabu search (Rosing et al., 1998,
1999). Schilling et al. (2000) recently showed that
the performance of both exact and heuristic algo-
rithms on p-median problems depends on the ex-
tent to which the triangle inequality is satisfied in
the network underlying those problems. The au-
thors showed that the frequency of the Teitz and
Bart algorithm finding the optimal solution de-
creased as the number of violations of the triangle
inequality increased, and the extent of the differ-
ence (the error) between the Teitz and Bart solu-
the frequency of these violations. In addition, the
linear program achieved an all zero-one solution
less frequently and the amount of branching and
bounding required was more extensive. Genetic
algorithms have also assumed their place in the
context of solving p-median problems. A promis-
ing approach was reported by Bozkaya et al.
(2002).
The simple plant location problem (SPLP),
sometimes also referred to as the uncapacitated
facility location problem (UFL), is similar to the p-
median problem, except that the number of facil-
ities to be located is endogenous to the problem.
This is achieved by deleting the constraint (4) in
the
P above formulation, and adding the term
j2J fj yj to the objective function (1), where fj
denotes the fixed costs that are incurred if a facility
is established at the jth node. Although Balinski
(1965) was the first to formulate the problem, he
abandoned the formulation because his colleague
Gomory demonstrated a small (2 · 3) counter-
example which terminated with fractional vari-
ables. A good survey is provided by Cornuejols
et al. (1990).
Morris (1978) and ReVelle and Swain (1970)
have demonstrated through experiments that p-
median problems and the simple plant location
problems are ‘‘integer-friendly’’ (ReVelle, 1993);
that is, their linear programming relaxations tend
to have integer or near-integer solutions that re-
quire but a few branchings in a subsequent branch-
and-bound procedure. Although many have
worked on plant location solution methods; see,
e.g., Galv~ao (1989, 1993), the methodology that
currently reports best results to the plant location
problem is that of K€ orkel (1989). The related
capacitated plant location problem is identical to
the simple plant location problem with the addi-
tion of capacity constraints on the facilities. Work
in this area seems to offer ambiguous results. These
additional capacity constraints destroy the prop-
erty that all demand of a customer is satisfied from
a single facility. To see this, consider a simple
scenario in which, as usual, the closest facility
satisfies the demand of a single customer, until the
supply runs out, and the remaining demand must
be satisfied from a more distant facility. The loss of
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
the ‘‘single-facility property’’ makes the capacit-
ated plant location problem much more difficult
than the corresponding simple plant location
problem. Experiments appear to suggest that the
frequency of integer solutions and the perfor-
mance of algorithms for capacitated problems are
related to the closeness of the available system
capacity to the demand being distributed; see
Heller (1985).
ReVelle and Laporte (1996) provide a review
that exposes new and challenging problems in
plant location. Brimberg and ReVelle (2000) offer
a solution to one of the many problems posed
there, the maximum return on investment prob-
lem. However, many practical plant location
problems remain unsolved, or, indeed, unap-
proached. An example is a problem in which
plants ship goods to warehouses in an out-and-
back movement and warehouses supply demand
nodes, e.g., supermarkets, with a delivery tour.
In contrast to the p-median problem and the
plant location problem, both of which focus on
aggregate access or the aggregate cost of delivery,
the p-center problem on the network seeks the set
of facilities that minimizes the maximum distance
that separates any demand node from its nearest
facility. It is easy to demonstrate that solutions to
the p-center problem typically do not have at least
one solution in which the facilities are all at nodes
of the network. That is, centers are usually located
somewhere along an edge of the network. As a
result, location scientists distinguish between node
centers (in which the eligible facility locations may
be restricted to vertices of the network) and
absolute centers, in which the facility location
could be anywhere on the network. It is apparent
that a 1-node center can be found by examining all
nodes as potential candidates. Determining a sin-
gle absolute center is more involved. First, each
edge (ni ; nj ) of the graph is examined, and the
distance from a node nk to all points on the edge
are determined. Each point on (ni ; nj ) can be
reached from node nk either via ni of nj , resulting
in linear functions on the edge (ni ; nj ) with slope +1
and )1, respectively. The minimum, i.e., the lower
envelope indicates the closest distance from a point
on the edge to nk . The point on this edge that is
most distant is the maximum of this function. The
9
longest distance to any of the given nodes requires
taking the maximum over all such piecewise linear
concave functions. Finally, the best solution is
one that chooses the edge that minimizes the
maximum. In other words, the 1-absolute center
is really a min-max–max-min problem. It is no
surprise that the general case of p-centers is con-
siderably more difficult. Kariv and Hakimi (1979a)
have formally demonstrated that p-center prob-
lems on networks are NP-hard. These results hold
for both vertex centers and absolute centers.
In some instances, particularly when emergency
facilities are to be located, neither the concept of p-
median nor that of a p-center may be satisfactory.
Instead, decision makers may wish to ‘‘cover’’
customers. A customer or demand node is said to
be covered by a facility, if the distance or time
between a client and its closest facility is no greater
than a prespecified value of S, the distance or time
standard. As an example, it may be required that
no tract of houses in a municipality is farther than
112 miles (or 5 minute) from the nearest fire station
or ambulance.
To illustrate the models, we again define zero–
one variables xj that equal one if a facility is lo-
cated at node j and zero otherwise. We denote dji
as the distance between the jth facility site and the
ith customer. Then, we can define coverage sets
Ni ¼ fj : dji 6 Sg. The set Ni includes all potential
facility locations which can dispatch to and reach
customer i within the standard. The location set
covering problem, or LSCP (see Toregas et al.,
1971; ReVelle et al., 1976), can then be formulated
as
X
Min z ¼ xj
j2J
X
s:t: xj P 1 8i 2 I;
j2Ni
xj ¼ 0 _ 1 8j 2 J :
While the problem is formally NP-hard, large
instances of network-based location set covering
problems have been solved easily by linear pro-
gramming and the occasional addition of solution-
derived cutting plane constraints to achieve all 0–1
solutions. In brief, the often successful cut that is
added simply rounds the objective value from an
10 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
integer plus a fraction to the next highest integer.
Toregas and ReVelle (1973) describe a set of
reduction rules that use the principles of essential
columns plus notions of row and column domi-
nance. The repeated application of the reduction
rules is often capable of reducing the size of loca-
tion set covering problems dramatically and even
solving problems ab initio. When the sequence of
rules fails to reduce the problem to an answer, the
remaining matrix is termed ‘‘cyclic’’, describing the
relationship between variables and constraints.
Experience with location set covering problems
solved by both linear programming and by
reductions/essential columns suggests that those
problems that reduce to cyclic matrices will also
fail to be solved without a cutting plane being
added when a linear programming solver is ap-
plied.
A consequence of the ability of the location
scientist to solve the LSCP easily is that the p-
center or minimax distance problem on a network
with a prespecified set of eligible facility sites and a
given number of facilities can also be solved effi-
ciently. In particular, Minieka (1970) suggested a
solution of the minimax distance problem for p
given facilities by solving a series of location set
covering problems with successively decreasing
distance or time standards S. As the distance
standards are tightened (i.e., decreased), the
number of required facilities will remain the same
for a number of values of S and then suddenly
increase. At the smallest distance value before the
number of facilities increases from p to p þ 1 (or
higher), the maximum distance from any demand
node to its nearest facility is, by definition, a
minimum––that is, the p facilities and their posi-
tions at this distance value minimize the maximum
distance.
The location set covering problem requires that
each customer must be covered, a requirement that
is very restrictive. In a problem with many spa-
tially dispersed population nodes, the requirement
of complete coverage of all demands may produce
solutions with a number of facilities that is unre-
alistic from a budgetary point of view. Several
possibilities for problem restatement emerge
immediately. The first is known as the maximum
covering location problem, or MCLP, introduced
by Church and ReVelle (1974). Denoting weights
wi as the number of customers located at node i,
the maximum covering location problem seeks to
locate an economically feasible number of facili-
ties, say p, in such a way that the number of cus-
tomers covered within the standard by the
facilities, is maximum. The reduction rules for the
location set covering problem no longer apply
easily, making the MCLP potentially more chal-
lenging to solve. Nonetheless, linear programming
supplemented by branch and bound as well as
greedy and exchange heuristics have all been ap-
plied with success. A thorough review of the
application of covering problems in location set-
tings as well as to many other situations is offered
by Schilling et al. (1993).
Another possibility to get around the complete
coverage requirement is to maximize the expected
coverage of demand nodes, a problem that Daskin
(1983) formulated and solved, although this for-
mulation requires knowledge of the probability of
a system-wide level of servers being busy. Still a
third possibility is to solve the p-center problem
given a number of facilities that reflects a realistic
budget limitation. That is, in lieu of minimizing the
number of facilities needed to cover all demand
nodes within the preset standard S, a realistic
number of facilities is examined to determine the
value of the smallest distance standard can be
achieved for all demands with p facilities. The
problem can also be extended into the probabilistic
realm with chance constraints on the reliability of
coverage being available within a distance or time
standard. Further, multiple types of interrelated
facilities may be modeled. A recent review of
location covering problems that apply principally
to emergency services is provided by Marianov
and ReVelle (1995).
The siting of facilities through time to serve
evolving demands (as opposed to cyclic or periodic
demands through a day or year) has been a topic
of recurring interest beginning in the 1960s. Pio-
neering work in this field was done by Ballou
(1968), whose contribution focused on the private
sector problem of warehouse location. By the
1970s, applications in discrete as well as continu-
ous location in both plant and warehouse location
as well as public facilities location were being
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
offered. Roodman and Schwarz (1975), and
Wesolowsky and Truscott (1975) considered the
possibility of plants phasing in and phasing out of
the solution set as demands evolved through time.
Their ideas were later picked up in public sector
location (in particular, in set covering models) by
Gunawardane (1982), and Chrissis et al. (1982). A
survey of the history of contributions in this field
in the private and public sector is found in the
review by Owen and Daskin (1998).
The field of dynamic location to serve evolving
demands slowed considerably by the late 1980s,
perhaps because the field had been mined of ideas,
or possibly because the difficulty of solving prob-
lems with an inordinate number of variables im-
peded progress. The increase in the number of
variables occurs because both, facility variables
and assignment variables, require the time sub-
script. Another potential reason for the slowdown
is that researchers may have realized that the
forecasting of demand through time is a very dif-
ficult task. The last of these reasons is suggested by
the present research focus in siting facilities to
serve demands that evolve through time. This
current approach uses the idea of scenarios and
eliminates the need for precise demand prediction,
thus obviating, at least to some extent, the need for
an excessive number of variables. In particular, the
notion of generating a number of scenarios or
snapshots of what future demand might look like
seems to have replaced the idea of responding to
predicted demand through time. These scenarios
are reminiscent of the ‘‘states of nature’’ used in
decision analysis, see, e.g., Eiselt and Sandblom
(2004). The earliest location work to take the
scenario approach to siting facilities appears to be
Schilling (1982). By the late 1990s, a number of
authors had picked up this theme, applying it to
competitive location as well as the p-median, see
Owen and Daskin (1998) and Serra and Marianov
(1999). At present, the scenario approach appears
to dominate other methods that deal with time-
evolving demands, and new applications of this
methodology are expected in the future.
In contrast to the location models cited above
that focus on demands that grow or shrink in a
maturing pattern through time, another line of
location research has taken up the issue of de-
11
mands that cycle through time. The work by Re-
pede and Bernardo (1994) on cyclic demands for
emergency services is one of the very few refer-
ences on the subject. However, informal discus-
sions indicate that many researchers have thought
about these problems. It is well known in emer-
gency services that demand changes in a relatively
predictable pattern through the day week, and
season. In particular, calls for ambulance service
peak during rush traffic hours and on Friday and
Saturday nights, when accidents and violence in-
crease. Although it may be possible to retire some
ambulance crews during slack hours, while
engaging additional crews during peak times, it
seems less likely that crews will move to new
locations for the slack times. This requires that
locations of crews during rush hours must be ro-
bust, so that their locations during non-peak hours
are still reasonably efficient. Another setting in
which cyclic demands may be encountered is in
plant or warehouse location, where demands
change by season for goods such as air condi-
tioners, beer, and clothing. Pertinent problems are
challenging in the context of siting, operation,
sizing, and storage, making them highly complex.
A few researchers have begun to focus on these
problems; see, e.g., Ratick et al. (1987) and Osleeb
and Ratick (1990).
Closely related to dynamic location models are
problems that involve uncertainty––since many
aspects of uncertainty deal with the details of fu-
ture conditions. These details become certain as
time passes into the present and past. The most
obvious uncertainty in location models is probably
the uncertainty of demand. The first to deal with
demand uncertainty was Frank (1966). Owen
and Daskin (1998) distinguish between probabi-
listic approaches and scenario approaches, the
latter having been discussed above. Probabilis-
tic methods may employ tools from mathemati-
cal programming such as chance-constrained
programming. Constraints on the probability of
servers availability within a time standard were
offered by ReVelle and Hogan, 1989 and are re-
viewed by Marianov and ReVelle, 1995. Another
approach derives from queuing, where customers
will patronize facilities not only based on their
proximity to them, but also on the (expected)
12 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
congestion at the facilities. Larson’s (1974)
hypercube model and Brandeau and Chiu’s (1992)
stochastic queue center problem belong to this
category as do models due to Batta (1989) and
others. It is fair to say that stochastic zero–one
programming is a challenging area and that the
rate of new articles in this area will likely mirror
the relatively slow progress in stochastic pro-
gramming itself.
Despite our focus on a multiplicity of problem
settings, there is one assumption common to vir-
tually all but a few location models. Here, we refer
to the assumption that demand occurs only at
specified points in the plane or nodes in a network.
It is apparent that this assumption is a convenience
for modeling purposes. In both, public and private
facility location problems many users may have
been aggregated and modeled as a single demand
point. Such a point may represent a number of
potential emergency calls, customers with an
anticipated demand, or clusters of voters in polit-
ical models. Beginning with Current and Schilling
(1990), a steady stream of articles has considered
the impact of aggregation. The most recent article
at the time of writing is a review by Francis et al.
(2002). Location scientist are well-advised to
ponder the issue of aggregation because many
users, themselves typically not location scientists,
frequently question the impact of aggregation. It is
mandatory that analysts are aware of the errors
introduced by aggregation, if they want to see the
solutions of their models applied in practice.
6. Extensions of the basic problem structures
In this section, we discuss some of the more
interesting ‘‘other’’ location models, focusing on
novel structures, unusual settings, and clever
objectives that have been developed.
6.1. Cent-Dians and Medi-Centers
We begin with two obvious extensions, both
designed to reconcile medians and centers. A cent-
dian (see, e.g., Halpern, 1976) is a point that
minimizes a linear convex combination of minisum
(i.e., median) and minimax (i.e., center) objectives.
A medi-center (see, e.g., Handler, 1985) minimizes
the average distance, subject to a constraint that
all customer-facility distances do not exceed a
prespecified limit. Both can easily be parameter-
ized by varying the weights and bounds, respec-
tively. The resulting output––the tradeoff between
minimum average distance and maximum dis-
tance––gives invaluable information regarding the
robustness of the solution.
6.2. Undesirable facility locations
The concept of undesirable facility locations has
already been alluded to above. An immediate
observation is that, as opposed to minisum and
minimax problems, the corresponding maxisum
and maximin problems require a bounded set, in
which the location of the facility is to be chosen,
since otherwise the optimal location moves an
infinite distance from the nodes to be avoided.
Another important consideration is that the im-
pact of the facility or facilities on the population at
a node is a cumulative one, reflecting the burden
placed on the node by all of the facilities, including
the nearest facility. In problems of customer access
and of goods movement, the transportation of
goods usually takes place on the least expensive
route, making the shortest path between customer
and facility a natural choice (except in the case of
urban transportation when transportation may be
embedded in a traffic assignment model). In con-
trast, when dealing with polluting facilities, a
customer is not just affected by the closest facility,
but typically by all of them. This has serious
algorithmic consequences.
6.3. Balancing objectives
There are very few actual (as opposed to po-
tential) applications of location models with bal-
ancing objectives, objectives that attempt to
equalize the treatment of all customers. The main
reason appears to be the problem of measurement.
It is not surprising that the definition of equity
does, of course, lend itself to socio-economic and
even philosophical interpretations. Typical equity
objectives use the variance of access distances,
Lorenz curve (that is typically used to measure
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
income inequality), or the related Gini index as an
expression that measures the equity or inequity of
a set of sites. A simple example of location on the
plane demonstrates that equity objectives should
be used in conjunction with an efficiency objective
rather than as stand-alone objectives. Consider
three customers, whose locations form a triangle,
in which one angle approaches 180. The point
that optimizes the equality of distances is the
center of the circle on whose circumference the
three points are located. This point can be very
distant from each of the three points. In moving
the distant facility towards the three customers,
each customer gains in that the customer-facility
distance decreases. However, this gain is achieved
at the ‘‘expense’’ of making the three distances
more unequal. A discussion of equity objectives
can be found in Erkut (1993), Marsh and Schilling
(1994) and Eiselt and Laporte (1995). An inter-
esting implementation is provided by Mandell
(1991).
6.4. Hierarchical siting problems
Hierarchical location problems occur in many
health care contexts. There are different levels of
health care, e.g., a doctor’s office (or maybe just a
nursing station) at the lowest level, a small clinic
on the next-higher level, and a full-service hospital
at the highest level. Each facility on some level
generally provides all the services of a facility on
the next-lower level. The question is then how to
serve or cover as many people as possible within
feasibility (e.g., cost) constraints. Two of the early
references in this context are Narula (1984) and
Moore and ReVelle (1982) with recent work by
Serra and ReVelle (1993, 1994a,b). A classical
reference of hierarchies in descriptive geography is
L€osch (1944), who established locational patterns
of central places in Southern Germany which
resemble honeycomb patterns typically found in
Voronoi diagrams.
Another type of hierarchy naturally occurs in
the industrial context, as goods move from the
point of extraction to manufacturing plants that
convert the resource into a product, followed by
distribution through warehouses to points of de-
mand. In the parlance of industrial decision mak-
13
ing, this is known as a supply chain. Slats et al.
(1995) and similar work focuses on the operation
of the supply chain as the primary consideration.
In contrast, location analysts are expected to focus
on the design at first and the operation second.
The supply chain idea may be inverted as well.
Solid wastes are collected at the local level, mod-
eled at the postal code level, perhaps, of an urban
area, transported on small trucks to a transfer
station (perhaps to be sited) and then loaded onto
large trucks for transport to landfills or other final
disposal facilities, also to be sited. The system is
very similar to the industrial system cited above;
see, i.e., Kulcar (1996). A review of solid wastes
management from an OR perspective is provided
by Liebman (1997) who includes in his review the
models which site transfer stations. As Fleisch-
mann et al. (1997) point out, the idea of reverse
logistics fits in this schema as well.
An early work on the siting of plants and
warehouses is Kaufman et al. (1977), who de-
scribed an implicit enumeration algorithm for the
problem. The problem structure led to an excessive
number of variables making solution of reason-
ably sized problems problematic. Ratick et al.
(1987) and Osleeb and Ratick (1990) focus on
siting the facilities in a supply chain through time.
Similarly, Bhaskaran (1992) also emphasizes the
supply chain operation in the location of inter-
mediate transfer facilities. More recently, Bender
et al. (2002) have described the implementation of
location software along with a GIS interface to
elucidate location decisions in supply chain man-
agement. The research on location in a supply
chain environment is challenging because of the
potential size, especially the number of variables,
of the problems and the number of zero–one siting
variables.
6.5. Hub location problems
Hub location problems arise in contexts in which
customers require transport between a large
number of origin–destination pairs. This area of
research was introduced to the location literature
by O’Kelly (1986, 1987). Frequently, it is cheaper
for the carrier, to avoid direct routing between all
pairs between which flow occurs. Instead, hub
14 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
networks are assembled that require customers to
travel from their origin to a central hub, from
there either to their destination or to another hub,
and if to a second hub, then to continue on to their
final destination. Hub systems are very popular in
the airline industry; a special issue of Location
Science (volume 4, issue 3, 1996) is devoted to such
problems. The reviews by Bryan and O’Kelly
(1999) and Campbell et al. (2002) are compre-
hensive. It is worth pointing out that the solution
of such problems does not exclusively benefit the
carrier: typically, traffic between most origin–des-
tination pairs does not justify frequent service,
whereas the hub system allows customers to fly
much more frequently to their destination, at the
expense of one or two transfers.
6.6. Competitive location problems
Competitive location problems may incorporate
not only location decisions, but also pricing deci-
sions as variables in the model, see, for instance,
Serra and ReVelle (1999). In its simplest form, a
competitive location problem seeks the positions
and prices which maximize the market captured
(as measured in customers or profit) from previ-
ously positioned competitors. The field emerged
with Hotelling’s (1929) contribution of duopolists
competing in a linear market––Hotelling’s famous
‘‘main street’’. The possibility of price undercut-
ting results in a large degree of instability, as wit-
nessed by the many contributions in the literature;
for surveys see, Eiselt et al. (1993), Serra and
ReVelle (1995) and Plastria (2001). The contribu-
tions in the economics literature typically deal with
the existence of Nash equilibria, as derived using
the tools of game theory. Such an equilibrium can
loosely be stated as a solution, in which neither of
the competitors has an incentive to unilaterally
change the current solution. Research in the area
has revealed that Hotelling-models are inherently
unstable, in the sense that even seemingly minor
changes of location rules or parameters can not
only change the solution, but can also destroy or
establish Nash equilibria.
Another approach is sequential competitive
location, in which a leader in the (location or
pricing) game is followed by a follower in the game
(Serra and ReVelle, 1993, 1994b). The idea is
based on the work of the German economist von
Stackelberg (1943), who was the first to consider
duopolies in which one firm acts as leader of the
game, while the other is the follower. The earliest
analytical location contribution in this area is by
Hakimi (1983), who termed the locations of the
follower medianoids. Medianoids result from con-
ditional location problems, in the sense that the
follower takes the locations of the leader as given.
Hakimi referred to the leader’s location as cent-
roids in the sense that the leader of the game will
take the optimized reaction of the follower into
consideration and protect against it by using a
minimax strategy. ReVelle (1986) formulated and
solved the follower’s problem. He referred to it as
a maximum capture problem, and recognized cap-
ture as a form of covering.
Competitive location problems may be ex-
tended to include free entry, in which additional
facilities can enter the market, as long as it is
profitable to do so. In these problems, each entrant
into the market must act as leader by protecting
himself against new entrants. The complexity of
these models usually requires computational sim-
ulations.
6.7. Combined siting and routing
Location–routing problems incorporate the
issues of location and routing in a single model. As
an example, Bouliane and Laporte (1992) consider
the simultaneous location of postal relay boxes
and the routing of postal trucks for deliveries and
pickups. Perl and Daskin (1985) make an early
contribution to this area. Clearly, as just about all
known routing problems are NP-hard, the addi-
tion of a location component does not make them
any easier to solve.
We also need to mention p-dispersion problems
which do not include any customers, but attempt
to locate facilities, so as to maximize the shortest
distance between any facility and its nearest
neighbor. Typical applications for this type of
problem are found in the military context, where
the decision maker attempts to locate, say,
ammunition dumps, so as to ensure that the dis-
covery and subsequent destruction of one such
 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
facility has as little impact as possible on the other
facilities. An early reference is Shier (1977). Similar
problems are p-defense problems which maximize
the sum of distances between facilities closest to
each other. For details, readers are referred to
Moon and Chaudry (1984).
6.8. Capture problems
So far, we have assumed that demand in loca-
tion–allocation models occurs at points of a net-
work, and that we serve this demand through
point-to-point travel. For many types of service,
service stations, fast food outlets, and automatic
teller machines, customer demand does not occur
entirely at points (e.g., the residence of the cus-
tomer), but along a path, e.g., a customer’s daily
route to work. The idea is now to capture or
intercept as much potential demand as possible.
For that purpose, Hodgson (1990) introduced the
flow capturing location-allocation model (FCLM)
which serves such demands by locating facilities to
intercept them en route. He indicated that the
model has the structure of the MCLP, and stressed
the need to avoid flow cannibalization, or double
counting. The model has been adapted to vehicle
inspection stations (Hodgson et al., 1996) and
billboards (Hodgson and Berman, 1997). Berman
et al. (1995) review these models. From a technical
point of view, one of the important issues in
flow capturing (also known as flow interception)
models is the potential for double counting of the
capture. In order to avoid this, it is necessary to
define additional zero–one variables that indicate
whether or not an individual who has taken a
particular route, has or has not been exposed to at
least one of the facilities.
7. Conclusion and future prospects
In this paper we have surveyed a number of the
important problems in facility location. The field is
very active with many interesting problems still
being investigated, both from a problem state-
ment/formulation standpoint and from an algo-
rithmic point of view; for details, see ReVelle
(1997). Although the field is active from a research
15
perspective, when it comes to applications, there
appears to be a significant deficit, at least as
compared to other, similar, fields. One reason may
be the fact that many of the practical location
problems faced by executives and public sector
decision makers are strategic problems, having
multiple objectives and structures that do not fall
into the relatively easy categories outlined above.
In other words, the main obstacles to the appli-
cation of the many models that are available to-
day, could be problems of measurement, finding
consensus among groups of decision makers, and
‘‘selling’’ agreed-upon location choices to the
general public. In their insightful contribution
regarding the location of hazardous materials,
Kleindorfer and Kunreuther (1994) describe ways
of dealing with the planner–public interface.
One possibility to overcome this applications
deficit is to build more comprehensive integrated
models, at the expense of an exponentially in-
creased complexity of the models and required
algorithms. Other, possibly more promising, ap-
proaches might employ fairly simple subproblems
with structures that fit the above categories within
the context of decision support systems. Coupled
with extensive sensitivity analyses, this approach
appears to have potential. However, falling back
onto a one-size-fits-all general mixed integer pro-
gramming problem may be required in the case of
more complex scenarios.
Another recently developed tool may help
overcome the dearth of applications of location
models. Here, we are referring to spatial display
tools that are, in part, designed to overcome the
communications barrier between location analysts
and locators. Geographic information systems
(GIS), especially when coupled with location
models and efficient algorithms, have the ability to
vividly display the results of the user input and,
most importantly, the changes that result from
input modifications. This display tool, coupled
with techniques designed to deal with fuzzy input
from multiple decision makers may, after all, result
in many more location models being applied by
practitioners.
Communication barriers aside, we also know
that university professors are usually given
little incentive to apply their methodologies.
16 C.S. ReVelle, H.A. Eiselt / European Journal of Operational Research 165 (2005) 1–19
Publications in journals are the currency of pro-
motion cases, and applications achieve little cred-
ibility unless they include some theoretical content.
The reversal of this longstanding pattern seems
difficult unless some level of government provides
financial incentives for transferring the technology
of location or unless industrial sponsorship is
offered; see ReVelle (1997).
Acknowledgements
This research was, in part, supported by a grant
from the Natural Sciences and Engineering
Council of Canada. This support is gratefully
acknowledged. The authors wish to express their
appreciation to an anonymous referee for a num-
ber of valuable comments that helped to clarify a
variety of issues.
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