A Generalized Assignment Approach to Optimal Facility Layout

The problem is considered of locating facilities of known areas so as to minimize a total cost consisting of costs directly proportional to the average distances between facilities and known points in the plane. An example would be the layout of products in a warehouse so as to minimize the total cost due to moving products to and from warehouse docks. We show that the problem can be accurately represented, and solved efficiently, as a generalized assignment problem, which is a special case of the transportation problem. An interesting special case of the location problem may be solved by a simple ranking procedure.