Solving capacitated clustering problems

This paper presents two effective algorithms for clustering n entities into p mutually exclusive and exhaustive groups where the ‘size’ of each group is restricted. As its objective, the clustering model minimizes the sum of distance between each entity and a designated group median. Empirical results using both a primal heuristic and a hybrid heuristic-subgradient method for problems having n ? 100 (i.e. 10 100 binary variables) show that the algorithms locate close to optimal solutions without resorting to tree enumeration. The capacitated clustering model is applied to the problem of sales force territorial design.