Introduction to

Management Science
Session 13

Location Models
Also called Facility Location Models
Typically a region requires coverage i.e.
some demand that needs to be fulfilled
Facilities or servers fulfill demand

Three basic varieties

Set covering location problem (SCLP)
Maximum coverage location problem (MCLP)
Maximum availability location problem
(MALP)

Understanding the Basics

Region is divided into zones (or
nodes/atoms)
Demand from each zone is assumed to be
aggregated at the geometric center of each zone
dij: distance from node i to j

Sample Problem
Assume a 10x10 mile region needs to be covered
The region is divided into zones or nodes of size
2x2
Coverage criterion: distance = 2.2 miles

Set Covering Location

Problem
Given a distance or time constraint,
minimize the total cost of facilities
needed to cover a region
If cost of locating each facility is the
same, what is the true objective?

Sample
Problem SCLP
2
2

1
0

1
2

1
3

1
4

1
5

1
6

1
7

1
8

1
9

2
0

2
1

2
2

2
3

2
4

2
5

1
1

1
0

Set Covering Location Problem

Variables
1 if ambulance is located at node i
xi
0 if not
1 if node j is covered by server at node i
aij
0 if not

ci cost of locating an ambulance at node i

SCLP - Formulation
Minimize
n

c x
i 1

Subject to
n

a
i 1

ij

xi 1

xi 0,1

SCLP - Formulation
MIN X1 + X2 + X3 + X4 + X5 + X6 + X7 + X8
+ X9 + X10 + X11 + X12 + X13 + X14 + X15
+ X16 + X17 + X18 + X19 + X20 + X21 +
X22 + X23 + X24 + X25
SUBJECT TO
X6 + X2 +X1 >= 1
7
8
9
X1 + X3 + X7 + X2 >= 1
:
12
14
X12 + X8 + X14 + X18 + X13 >=
1 13
:
18
19
X23 + X19 + X25 + X24 >= 1 17
X24 + X20 + X25 >= 1

SCLP One Possible

Solution

Set Covering Location

Problem
Does not distinguish between nodes
based on demand volume
Does not consider the possibility that
an ambulance might not be available
at the time it is needed
What about the size of the nodes?
Increasing the node size means
Decreasing the node size means

Maximum Coverage Location

Problem
Takes into account the demand at
each node
Maximize coverage (demand
covered) in view of limited resources
(facilities)
Continuing with the previous
example
7 ambulances
Same region and distance criterion for
coverage

Sample Problem MCLP

1
0

2
0

3
2

3
5

2
5

1
2

1
6

2
2

1
0

1
2

1
5

2
0

Maximum Coverage Location

Problem
Variables
1 if node j is covered
yj
0 if not
1 if ambulance is located at node i
xi
0 if not
1 if node j is covered by server at node i
aij
0 if not
h j demand at node j

m total number of ambulances

MCLP - Formulation
Maximize

Subject to
n

a x

ij i

i 1
n

x
i 1

y j j

xi 0,1 i
y j 0,1 j

MCLP - Formulation
MAX 10 Y1 + 5 Y2 + 7 Y3 + 8 Y4 + 20 Y5 + 8
Y6 + 20 Y7 + 32 Y8 + 35 Y9 + 25 Y10 + 2
Y11 + 6 Y12 + 12 Y13 + 16 Y14 + 22 Y15 +
3 Y16 + 5 Y17 + 10 Y18 + 12 Y19 + 9 Y20 +
5 Y21 + 3 Y22 + 2 Y23 + 8 Y24 + 15 Y25
SUBJECT TO
X1 + X2 + X6 - Y1 >= 0
X1 + X2 + X3 + X7 - Y2 >= 0
:
X20 + X24 + X25 - Y25 >= 0
X1 + X2 + X3 + + X23 + X24 + X25 =

MCLP - Solution

Maximum Availability Location

Problem
Assume that servers may not always
be available
Server busy probability (same for all
servers)

Maximize demand covered with a

given level of reliability
Coverage reliability (constant
throughout)

Maximum Availability Location

Problem

MALP
Introduce a new variable
y jb

1 if b servers cover node j

0 if not

The question is, how do you decide

b?

Chance constraint
p = independent busy probability of a
server
reliability of coverage
n

aij xi

1 p i 1

log1

log
p

If busy probability is 0.2 and reliability level is 0.9,

b=2
20

MALP - Formulation
Maximize

h
j 1

Subject to n

a
i 1

y jb
b

ij

xi y jk j
k 1

y jk y j ,k 1 j
n

x
i 1

y jk , xi 0,1 i, j
21

MALP - Formulation
MAX 10 Y1B + 5 Y2B + 7 Y3B + 8 Y4B + 20
Y5B + 8 Y6B + 20 Y7B + 32 Y8B + 35 Y9B +
25 Y10B + 2 Y11B + 6 Y12B + 12 Y13B + 16
Y14B + 22 Y15B + 3 Y16B + 5 Y17B + 10 Y18B
+ 12 Y19B + 9 Y20B + 5 Y21B + 3 Y22B + 2
Y23B + 8 Y24B + 15 Y25B
SUBJECT TO
! for nodes 125
X6 + X2 +X1 - Y1A - Y1B >= 0
:
!2nd set of constraints
Y1B - Y1A <= 0
Y2B - Y2A <= 0
:
X1 + X2 +X3 + + X23 + X24 + X25 <= 7

Demand Distribution
10

20

20

32

35

25

12

16

22

10

12

15

MALP - Solution

Comparison
SCLP
SCLP minimizes the total cost of facilities
(e.g., servers, ambulances) needed to
cover a region assuming demand is the
same in all areas.
MCLP
Provides the maximum coverage which
can be achieved with a given set of
resources by taking into account the
different demand for each area.
MALP
Maximizes the demand covered with given
probability. In this case, it does not assure25
that all areas will be covered.

Comparison - Demand

26