Solving multiple facilities location problems with separated clusters

This paper examines a special case of multi-facility location problems where the set of demand points is partitioned into a given number of subsets or clusters that can be treated as smaller independent sub-problems once the number of facilities allocated to each cluster is determined. A dynamic programming approach is developed to determine the optimal allocation of facilities to clusters. The use of clusters is presented as a new idea for designing heuristics to solve general multi-facility location problems.