A geographical information system approach for evaluating the optimum location of point-like facilities in a hierarchical network

Nhis paper discusses a methodology for solving the problem of finding an optimum location for a number of facilities entering an existing hierarchical network. The locational optimization problem is approached with a continuous model. The facilities are considered as point-like. The proposed methodology solves these problems by using Voronoi diagrams to define the catchment area and minimizes the average distance traveled by the users. The approach is implemented by loose coupling between the Directed Tabu Search algorithm for continuous nonlinear optimization with constraints and the Geographical Information System where the cost function is evaluated. In the case study example, facilities operate in a hierarchical network consisting of bank branches and Automated Teller Machines (ATM) of a private Greek bank. A new bank branch location and the insertion of an ATM were examined and compared, providing an improvement of 25.6 and 12.8%, respectively. The proposed approach resulted in visualizing the optimum location on the map, providing the ability to study the modifications that occurred. This could be a useful tool in the hands of practitioners and provide new options in the decision-making process.