Optimal Locations on a Network

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Abstract
The paper considers the location of centers (e.g., plants, warehouses) on a network. Necessary conditions and sufficient conditions for optimal solutions to occur at nodes in the network are determined. The conditions include consideration of capacity constraints and the possibility that not all shipments are made via the “shortest route.” The cost functions may differ from arc to arc. A proof is given for the sufficiency of node locations in situations of multistage processing when transport costs are concave over each arc. Three sets of conditions under which it is necessary for an optimal solution to occur at a node are investigated. One set of conditions involves a production function characterization of the centers being located.

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