Module 03

Facility Location Problems

(Single and Multiple Facility Location Problems)

 Facility Location Problems

Facility Location Problems involve determining

the location of one or more new facilities in one
or more of several potential sites. The cost of
locating each new facility at each of the potential
sites is assumed to be known. It is the fixed cost
of locating a new facility at a particular site plus
the operating and transportation cost of serving
customers from this facility-site combination.
 Factors Affecting Location Problems

• Proximity to source of raw materials.

• Cost and availability of energy and utilities.
• Cost, availability, skill, and productivity of labor.
• Government regulations at the federal, state and local levels.
• Taxes at the federal, state and local levels.
• Insurance.
• Construction costs and land price.
• Government and political stability.
• Exchange rate fluctuation.
• Export and import regulations, duties, and tariffs.
 Factors Affecting Location Problems
• Transportation system.
• Technical expertise.
• Environmental regulations at the federal, state, county and local
levels.
• Support services.
• Community services - schools, hospitals, recreation, and so on.
• Weather.
• Proximity to customers.
• Business climate.
• Competition-related factors.
 Basis for Classifying Location Problems
Number of facilities
Single Facility Problems (only one facility)
Multiple Facility Problems (more than one facility)
Objectives
Minisum (minimizing sum of all cost elements)
Minimax (enclose maximum points in a minimum
radius circle) / circle covering problem
Distance Measures
Rectilinear distance
Straight line or Euclidean distance
Contour Lines
Tchebyshev distance
 Distance Measures

Pi = (ai, bi)
• Rectilinear distance (L1 norm)
– d(X, Pi) = |x - ai| + |y - bi|

X = (x, y)

• Straight line or Euclidean distance (L2 norm)

Pi = (ai, bi)
– d(X, Pi) = (x - a i ) 2 + (y - b i ) 2

X = (x, y)
• Tchebyshev distance (L∞ norm)
Pi = (ai, bi)
– d(X, Pi) = max{|x - ai|, |y - bi|}

X = (x, y)
Classification of Facility Location Problems

# of facilities Objectives Distance measures

Rectilinear
Minisum Euclidean

Tchebyshev
Single-
Facility
Rectilinear
Minimax Euclidean

Tchebyshev
Facility
Location
Rectilinear
Minisum Euclidean

Tchebyshev
Multi-
Facility
Rectilinear
Minimax Euclidean

Tchebyshev
Single Facility Location Problems

Rectilinear Distance Problems

(Rectilinear = horizontal & vertical lines)

Objective is to minimize the horizontal

movements as well as vertical movements
 Rectilinear Distance Location Problem
• Locating a new central facility among ‘n’ existing
demand points / facilities.
– locating a warehouse that distributes merchandise to a number
of retail outlets
– locating a supplier that provides parts to a number of different
production facilities
– locating a new equipment that processes parts that are
subsequently sent downstream to a number of different
workstations
• Locate the new facility to minimize a weighted sum of
rectilinear distances measured from the new facility to
the existing demand points / facilities.
 Mathematical Formulation of
Rectilinear Distance Location Problem
• Existing demand points are located at points (a1, b1),
(a2, b2), …, (an, bn)
• Find values of x and y (the location of the new
facility) to minimize
n
f ( x, y ) = ∑ w ( x − a + y − b )
i i i
i =1

• Weights (wi) are included to allow for different

traffic rates / usage frequency between the new
facility and the existing demand points / facilities
 Mathematical Formulation of
Rectilinear Distance Location Problem

• The values of x and y can be determined separately

f ( x, y ) = g ( x ) + g ( y )
1 2

n
g ( x) = ∑ w x − a
1 i i
i =1

n
g ( y) = ∑ w y − b
2 i i
i =1

• There is an optimal solution with x equal to some value of ai and

y equal to some value of bi (there may be other optimal solutions
as well)
 Mathematical Formulation of
Rectilinear Distance Location Problem

In general, the coefficient of x in any interval

defined by adjacent points (by median or so)
is the sum of the weights / coordinates /
weighted coordinates of the points to the left
of x minus the sum of the weights /
coordinates / weighted coordinates of the
points to the right of x when in decreasing
order.
 Example - 01

Four existing locations (3, 3), (6, 9), (12, 8), and (12, 10)
and a weight of 1 applied to each location.
– The median x value (half the x values lie above it and
half the x values lie below it) – in increasing order 3,
6, 12, 12 – any value of x between 6 and 12 is a
median value and is optimal (g1(x) = 24 – 9 = 15)
– The median y value – 3, 8, 9, 10 – any value of y
between 8 and 9 is a median value and is optimal
(g2(y) = 19 – 11 = 8)
 Effect of Weights

• Locations of four existing machines in a job shop are (3,

3), (6, 9), (12, 8), and (12, 10)
• Locate a new machine to minimize the total distance
traveled to transport material between this fifth machine
and the existing ones
• Assume there are on average 2, 4, 3, and 1 materials
handling trips per hour, respectively, from the existing
machines to the new machine
• This is equivalent to one trip but with 2 machines at
location (3, 3), 4 machines at location (6, 9), 3 machines at
location (12, 8) and the one machine at location (12, 10)
 Effect of Weights…

• x locations in increasing order 3, 3, 6, 6, 6, 6, 12,

12, 12, 12 – the median location is x = 6 (g1(x) =
30)
• y locations in increasing order 3, 3, 8, 8, 8, 9, 9, 9,
9, 10 - median location is any value of y on the
interval [8, 9] (g2(y) = 16)
 Way to Determine Median Location
Compute the cumulative weights - then determine the location or locations
corresponding to half of the cumulative weights

Machine x Coordinate Weight Cumulative Wght

one 3 2 2
two 6 4 6
three 12 3 9
four 12 1 10

Machine y Coordinate Weight Cumulative Wght

one 3 2 2
three 8 3 5
two 9 4 9
four 10 1 10
 Example Problem
A university is in the process of deciding on the site for its
new faculty tech support facility. The facility will be used
by faculty from six schools on campus: business,
education, engineering, humanities, law, and science. The
coordinates of the schools and the number of faculty that
are anticipated to use the facility each semester are shown
on the next slide. The campus is laid out with large grassy
areas separating the buildings and walkways are mainly
east-west or north-south, so that distances between
buildings are rectilinear. The university planner would like
to locate the new facility so as to minimize the total travel
time of all faculty planning to use it.
 Example Problem Data
School Campus Location Number of Faculty
Using Facility

Business (5, 13) 31

Education (8, 18) 28

Engineering (0, 0) 19

Humanities (6, 3) 53

Law (14, 20) 32

Science (10, 12) 41

 Mathematical Formulation of
Rectilinear Distance Location Problem

=Alternate Method=
 Single Facility Location Problem

• Minisum Formulation :
m
(
Min f(x) = ∑ w i × d X, Pi )
i =1
where X = (x, y) : location of the new facility
Pi = (ai, bi) : location of the i-th existing facility, i = 1, …, m
wi : weight associated to the i-th existing facility
ti
For example, wi = c i ,
vi
where ci : cost per hour of travel, ti : number of trips per month,
vi : average velocity.
 Minisum Location Problem with
Rectilinear Distances
m
Min f(x, y) = ∑ w i × [|x − a i |+ |y − b i |]
i=1

Note that f(x, y) = f1(x) + f2(y)

m
where f1(x) = ∑ w i |x − a i |
i=1
m
f2(y) = ∑ w i |y − b i |
i=1

The cost of movement in the x direction is independent of the cost of

movement in the y direction, and viceversa.
Now, we look at the x direction.
f1(x) is convex ⇔ a local min is a global min.
 Minisum Location Problem with
Rectilinear Distances (cont.)
• The coordinates of the existing facilities are sorted so that
a1 ≤ a2 ≤ a3 ≤ ….
• Now, we consider the case of m = 3.
Case x ≤ a1 :
f1(x) = w1 |a1 - x| + w2 |a2 - x| + w3 |a3 - x|
= - (w1 + w2 + w3)x + w1 a1 + w2 a2 + w3 a3
= - W x + w1 a1 + w2 a2 + w3 a3, where W = w1 + w2 + w3
Case a1 ≤ x ≤ a2 :
f1(x) = w1 |a1 - x| + w2 |a2 - x| + w3 |a3 - x|
= (w1 - w2 - w3)x - w1 a1 + w2 a2 + w3 a3
= (- W + 2 w1) x - w1 a1 + w2 a2 + w3 a3
…
 Objective Function f1(x)

f1(x)
- w1 - w2 - w3

The slope changes sign

w1 + w2 + w3

w1 - w2 - w3
w1 + w2 - w3

w1
w2

w3
a1 a2 a3 x
 Minisum Location Problem with
Rectilinear Distances …
• Slopes of f1(x) :
M0 = - (w1 + w2 + w3) = - W
M1 = 2 w1 + M0
M2 = 2 w2 + M1
M3 = 2 w3 + M2 = w1 + w2 + w3 = W
• Median conditions :
f1(x) is minimized at the point where the slope changes from nonpositive
to nonnegative.
M1 = w1 - w2 - w3 < 0 ⇔ 2 w1 < (w1 + w2 + w3) = W
w1 < W/2
M2 = w1 + w2 - w3 ≥ 0 ⇔ 2 (w1 + w2) ≥ (w1 + w2 + w3) = W
(w1 + w2) ≥ W/2
end
Single Facility Location Problems

Euclidian Distance Problems

(Inclined straight lines)
 Setup for the Minisum Problem with
Euclidean Distance

Hole

P2
P1

P3 String
P5
Horizontal
P4
pegboard

w2 w3
w1
w5
Weight proportional
w4
to wi

• Majority Theorem :
When one weight constitutes majority of the total other individual weights, an
optimal new facility location coincides the facility which has the majority weight.
 Single-Facility Euclidean Distance
Location Problem
Practical cases are:

• Minimize electrical cable when locating a

power-generation point which facilities
different customers.

• Reaching the greatest number of customers

with optimised cellphone tower locations.
 Minisum Location Problem with
Euclidean Distances
m 1
2 2 2
• Min f(x, y) = i=1
∑ w i × [(x − a i ) + (y − b i ) ]
(ai, bi)

• Colinear case : all the points are in a line

(ai, bi)
 Single-Facility Euclidean Distance
Location Problem
• Objective is to minimize Euclidean (straight-line)
distance
n
f ( x, y ) = ∑ wi (x − ai )
2
+ ( y − bi ) 2

i =1

• Determining the optimal solution mathematically is

more difficult than for either rectilinear or squared
straight-line distance (gravity problem)
 Single-Facility Euclidean Distance
Location Problem
• Iterative solution process
• Use (x*, y*) calculated from gravity problem (or as origin) to
determine initial gi(x, y)
•
n n

∑ a g ( x, y )
i i ∑ b g ( x, y )
i i
x= i =1
n
y= i =1
n wi
g i ( x, y ) =
∑ g ( x, y )
i =1
i ∑ g ( x, y )
i =1
i (x − ai )2 + ( y − bi ) 2

• Re-compute gi(x, y) using the new values of x and y

• Continue to iterate until the values of the coordinates converge (procedure
yields optimal solution as long as (x, y) at each iteration does not converge to
an existing location)
• Physical model – supported map with holes, ring, strings, weights
Single-Facility Location Problem with
Squared Euclidean Distances
 Factors Deciding Location - Examples

Location Characteristics:

Competitive, Demand Generators, Demographic, Market

Awareness, and Physical factors.

Profitability Factors:

Market awareness, local population, low unemployment,

accessibility to downtown office space, traffic count, median
income, competitive rates.
 Squared Straight-line Distance /
Gravity Method
• The objective is to minimize the square of the straight-line
distance

[ ]
n
f ( x, y ) = ∑ wi (x − ai ) + ( y − bi ) 2
2

i =1

• Differentiating and setting the partial derivatives equal to zero

n n

*
∑wa i i
*
∑wb i i
x = i =1
n
y = i =1
n

∑w
i =1
i ∑w
i =1
i
 Gravity Method - in Detail

The cost function is

As before, we substitute wi = fi ci, i = 1, 2,

..., m and rewrite the objective function as
 Gravity Method - in Detail

Since the objective function can be shown to be

convex, partially differentiating TC with respect to x
and y, setting the resulting two equations to 0 and
solving for x, y provides the optimal location of the
new facility
 Gravity Method - in Detail
Similarly,

Thus, the optimal locations x and y are simply the

weighted averages of the x and y coordinates of the
existing facilities.
 Gravity Method Example

Consider an example in which the distance

metric to be used is squared Euclidean.
Determine the optimal location of the new
facility using the gravity method.
 Gravity Method Example

Department i xi yi wi
1 10 2 6
2 10 10 10
3 8 6 8
4 12 5 4

Find the optimum facility location

 Gravity Method Example

Department i xi yi wi wixi wiyi

1 10 2 6 60 12
2 10 10 10 100 100
3 8 6 8 64 48
4 12 5 4 48 20
Total 28 272 180
 Gravity Method Example

If this location is not feasible, we only need to

find another point which has the nearest
Euclidean distance to (9.7, 6.4) and is a
feasible location for the new facility.
end
Single Facility Location Problem
(Contour Line / Iso-cost Line)
 Contour Lines / Iso-cost lines

The least cost locations generated using various techniques may be have
practical implementation issues (like unfeasible location such as
mountain, ocean etc. or on one of the demand points / facilities).

To overcome this issue we can find and evaluate other least cost
locations other than those which have the initial least cost.

The line which connects all least cost locations can be called the contour
lines / iso-cost lines.
Sample Contour Lines
 Sample Contour Lines

• The innermost line having smallest total cost value.

• The middle line having intermediate total cost value.
• The outer line having the largest total cost value.
Contour Line Construction Procedure
Contour Line Construction Procedure
Contour Line Construction Procedure
Contour Line Construction Procedure
 Algorithm for Drawing Contour Lines

Step 1: Draw a vertical line through the x coordinate and a horizontal

line through the y coordinate of each facility.

Step 2: Label each vertical line Vi, i=1, 2, ..., p and horizontal line Hj, j = 1,
2, ..., q where Vi = the sum of weights of facilities whose x coordinates
fall on vertical line i and where Hj = sum of weights of facilities whose y
coordinates fall on horizontal line j.
 Algorithm for Drawing Contour Lines
m
Step 3: Set i = j = 1; N0 = D0 = wi
∑
i=1
Step 4: Set Ni = Ni-1 + 2Vi and Dj = Dj-1 + 2Hj. Increment i = i + 1 and
j=j+1
Step 5: If i < p or j < q, go to Step 4. Otherwise, set i = j = 0 and
determine Sij, the slope of contour lines through the region
bounded by vertical lines i and i + 1 and horizontal line j and j + 1
using the equation Sij = -Ni/Dj. Increment i = i + 1 and j = j + 1
 Algorithm for Drawing Contour Lines

Step 6: If i < p or j < q, go to Step 5. Otherwise select any point (x, y) and draw a
contour line with slope Sij in the region [i, j] in which (x, y) appears so that the
line touches the boundary of this line. From one of the end points of this line,
draw another contour line through the adjacent region with the corresponding
slope.

Step 7: Repeat this until you get a contour line ending at point (x, y). We now
have a region bounded by contour lines with (x, y) on the boundary of the
region.
Algorithm for Drawing Contour Lines

Alternate method
= using cost equations =
 Algorithm for Drawing Contour Lines

1. The number of vertical and horizontal lines need not be equal.

2. The Ni and Dj as computed in Steps 3 and 4 correspond to the

numerator and denominator, respectively of the slope equation of
any contour line through the region bounded by the vertical lines i
and i + 1 and horizontal lines j and j + 1.
Algorithm for Drawing Contour Lines
 Algorithm for Drawing Contour Lines

By noting that the Vi’s and Hj’s calculated in Step 2 of the algorithm
correspond to the sum of the weights of facilities whose x, y
coordinates are equal to the x, y coordinates, respectively of the ith, jth
distinct lines and that we have p, q such coordinates or lines (p < m, q <
m), the previous equation can be written as follows
 Algorithm for Drawing Contour Lines

Suppose that x is between the sth and s+1th (distinct) x coordinates or

vertical lines (since we have drawn vertical lines through these
coordinates in Step 1). Similarly, let y be between the tth and t+1th
vertical lines. Then
 Algorithm for Drawing Contour Lines

Rearranging the variable and constant terms in the above equation, we

get
 Algorithm for Drawing Contour Lines

The last four terms in the previous equation can be

substituted by another constant term c and the coefficients
of x can be rewritten as follows

Notice that we have only added and subtracted the term

 Algorithm for Drawing Contour Lines

Since it is clear from Step 2 that

the coefficient of x can be rewritten as

Similarly, the coefficient of y is

 Algorithm for Drawing Contour Lines

• The Ni computation in Step 4 is in fact calculation of the

coefficient of x as shown above. Note that Ni=Ni-1+2Vi.
Making the substitution for Ni-1, we get Ni=Ni-2+2Vi-1+2Vi
• Repeating the same procedure of making substitutions for
Ni-2, Ni-3, ..., we get

• Ni=N0+2V1+2V2+...+2Vi-1+2V1=
Algorithm for Drawing Contour Lines

Similarly, it can be verified that

 Algorithm for Drawing Contour Lines

The above expression for the total cost function at x, y

or in fact, any other point in the region [s, t] has the
form y= mx + c, where the slope m = -Ns/Dt. This is
exactly how the slopes are computed in Step 5 of the
algorithm
 Algorithm for Drawing Contour Lines

3. The lines V0, Vp+1 and H0, Hq+1 are required for defining the “exterior”
regions [0, j], [p, j], j = 1, 2, ..., p, respectively)

4. Once we have determined the slopes of all regions, the user may
choose any point (x, y) other than a point which minimizes the
objective function and draw a series of contour lines in order to get a
region which contains points, i.e. facility locations, yielding as good or
better objective function values than (x, y)
Example Problem:

Two high speed copiers are to be located in the fifth floor of an office
complex which houses four departments of the Social Security
Administration. Coordinates of the centroid of each department as
well as the average number of trips made per day between each
department and the copiers’ yet-to-be-determined location are known
and given in Table 9 below. Assume that travel originates and ends at
the centroid of each department. Determine the optimal location, i.e.,
x, y coordinates, for the copiers.
Centroid Coordinates and Average Number of
Trips to Copiers
Dept. Coordinates Average number of
# x y daily trips to
copiers
1 10 2 6
2 10 10 10
3 8 6 8
4 12 5 4
Example Problem:

Suppose that the weight of facility 2 is not 10, but 20. Applying the
median method, it can be verified that the optimal location is (10, 10) -
the centroid of department 2, where immovable structures exist. It is
now desired to find a feasible and “near-optimal” location using the
contour line method.
Solution:
The contour line method is illustrated using
the figure below
Solution:
Step 1: The vertical and horizontal lines V1, V2, V2 and H1, H2, H2, H4 are
drawn as shown. In addition to these lines, we also draw line V0, V4
and H0, H5 so that the “exterior regions can be identified
Step 2: The weights V1, V2, V2, H1, H2, H2, H4 are calculated by adding
the weights of the points that fall on the respective lines. Note that for
this example, p=3, and q=4
Solution:
Step 3: Since
set N0 = D0 = -38

Step 4: Set
N1 = -38 + 2(8) = -22; D1 = -38 + 2(6) = -26;
N2 = -22 + 2(26) = 30; D2 = -26 + 2(4) = -18;
N3 = 30 + 2(4) = 38; D3 = -18 + 2(8) = -2;
D4 = -2 + 2(20) = 38;
(These values are entered at the bottom of each
column and left of each row in figure 1)
Solution:
Step 5: Compute the slope of each region.
S00 = -(-38/-38) = -1; S14 = -(-22/38) = 0.58;
S01 = -(-38/-26) = -1.46; S20 = -(30/-38) = 0.79;
S02 = -(-38/-18) = -2.11; S21 = -(30/-26) = 1.15;
S03 = -(-38/-2) = -19; S22 = -(30/-18) = 1.67;
S04 = -(-38/38) = 1; S23 = -(30/-2) = 15;
S10 = -(-22/-38) = -0.58; S24 = -(30/38) = -0.79;
S11 = -(-22/-26) = -0.85; S30 = -(38/-38) = 1;
S12 = -(-22/-18) = -1.22; S31 = -(38/-26) = 1.46;
S13 = -(-22/-2) = -11; S32 = -(38/-18) = 2.11;
Solution:
Step 5: Compute the slope of each region.

S33 = -(38/-2) = 19;

S34 = -(38/38) = -1;

(The above slope values are shown inside each region.)

Solution:
Step 6: When we draw contour lines through point (9, 10), we get
the region shown in the previous figure.

Since the copiers cannot be placed at the (10, 10) location, we drew
contour lines through another nearby point (9, 10). Locating
anywhere possible within this region give us a feasible, near-
optimal solution.
end
Multi Facility Location Problems
Multi Facility Location Problems (Planar) - Example
Existing / Old Facilities (EF)
• Concreting mixing / batching plant
• Steel manufacturing plant
• Steel cutting plant
• Shipping area

New Facilities to be located (NF)

 Concrete casting area
 Assembly and storage area

(all are planar facilities in same flat / level surface)

 Multi-Facility Location Problems

P4 P1

w24

w11
X2
X1

v12
w12 P2
w23

P3

Old Facility :
New Facility :
 Minisum Multi-Facility Location Problem with
Rectilinear Distances

Location of new facilities: Xj = (xj, yj), j = 1, …, n.

Location of existing facilities: Pi = (ai, bi), i = 1, …, m.
Weight between new facilities j and k: vjk, where k > j.
Weight between new facility j and existing facility i: wji.
Problem formulation:

Min f((x1,y1), …, (xn, yn)) = f1(x1, …, xn) + f2(y1, …, yn)

where n m

f1(x1, …, xn) = ∑v
1≤ j< k ≤ n
jk x j − x k + ∑ ∑ w ji x j − a i
j=1 i =1
n m

f2(y1, …, yn) = ∑v
1≤ j< k ≤ n
jk y j − y k + ∑ ∑ w ji y j − b i
j=1 i =1
 Multi-Facility Location Problem - Example

• Problem Data : n = 2 (NF) m = 3 (EF)

 0 2  2 1 0
v = [vjk] =   w = [wji] =  
 0 0  4 0 5
x = [xj] = (x1, x2) a = [aj] = (10, 20, 40)

Min f1(x1, x2) = 2 |x1 - x2| + 2 |x1 - 10| + |x1 - 20| + 4 |x2 - 20| + 5 |x2 - 40| ⇔
Min f1(x1, x2) = 2 (p12 + q12) + 2 (r11 + s11) + (r12 + s12) + 4 (r21 + s21) + 5 (r23 + s23)
s. t. x1 - x2 - p12 + q12 =0
x1 - r11 + s11 = 10
x1 - r12 + s12 = 20
x2 - r21 + s21 = 10
x2 - r23 + s23 = 40
• Relationships among variables :
x1 - x2 = p12 - q12, |x1 - x2| = p12 + q12, p12, q12 ≥ 0
xi - aj = rij - sij, |xi - aj| = rij + sij, rij, sij ≥ 0
 Multi-Facility Location Problem - Example

Max (- 10 u11 - 20 u12 - 10 u21 - 40 u23) + (10×2 + 20×1 + 10×4 + 40×5)

⇒ Min 10 u11 + 20 u12 + 10 u21 + 40 u23

s. t. z12 + u11 + u12 =5
- z12 + u21 + u23 =7
0 ≤ z12 ≤ 4
0 ≤ u11 ≤ 4
0 ≤ u12 ≤ 2
0 ≤ u21 ≤ 8
0 ≤ u23 ≤ 10
w ji v jk wi = ∑w +∑v
ji jk

 2 1 0  0 2  5
  +   =  
 4 0 5  − 2 0  7
12
Multi-Facility Location Problem - Example

The mathematical formulations can be

either solved or converted into an
equivalent network flow problem and
obtain the solution
 Equivalent Network Flow Problem

E1
u11 ≤ 4 (10)
(0)
4
5 Cap = ∞
N1 8 12
u12 ≤ 2
(0)
(0)
(20) Cap = ∞ 12
1 z12 ≤ 4 E2 N3
u21 ≤ 8
(0)

7
N2
Cap = ∞
u23 ≤ 10 (40)
(0)

E3

Draw a network included with a sink node N3. The network shows arc capacity in brackets, costs in
parentheses, flows in boxes. The solution can be usually obtained by inspection.
 Equivalent Network Flow Problem (cont.)

Complementary slackness conditions :

1. 0 < zjk* ⇒ xk* ≤ xj*
zjk* < 2 vjk ⇒ xj* ≤ xk*
In particular,
0 < zjk* < 2 vjk ⇒ xj* = xk*
2. 0 < uji* ⇒ ai ≤ xj*
uji* < 2 wji ⇒ xj* ≤ ai
In particular,
0 < uji* < 2 wji ⇒ xj* = ai
In Example 3,
0 < z12* < 2 v12 ⇒ x1* = x2*,
0 < u12 = 2 w12 ⇒ x2* = a1 = 10.
If the network is not connected, then the problem decomposes into independent problems, one
for each component.
(Idea on network flow problem may be refreshed)
end
LP Formulation with
Rectilinear Distance
 LP Formulation with Rectilinear Distance

Parameters
fi = Traffic flow between new facility and existing facility i.
ci = Unit transportation cost between new facility and existing facility i
xi, yi = Coordinate points of existing facility i
Decision Variables
x, y = Optimal coordinates of the new facility.
TC = Total distribution cost
LP Formulation with Rectilinear Distance

The median location model is then to

 LP Formulation with Rectilinear Distance

Since the cifi product is known for each facility, it can be thought of as a
weight wi corresponding to facility i. The previous equation can now
be rewritten as follows
LP Formulation with Rectilinear Distance
LP Formulation with Rectilinear Distance
LP Formulation with Rectilinear Distance
LP Formulation with Rectilinear Distance

The LP model can be solved and find out the optimal

location of the facility.
end