An effective heuristic for the P-median problem with application to ambulance location

We consider the p-median problem which is to find the location of p-facilities so as to minimize the average weighted distance or time between demand points and service centers. Many heuristic algorithms have been proposed for this problem. In this paper we present a simple new heuristic which is effective for moderately size problem. The heuristic uses a reduction and an exchange procedure. Our methodology is tested on 400 randomly generated problems with 10 to 50 customer locations as well as 6 well known literature test problems. We also compare our method with the Branch and Bound method in terms of quality and computational time using a larger problem size of 150 customer locations. For the random problems the generated solutions were on average within 0.61 % of the optimum. A similar result was achieved for the literature test problems. A comparative analysis with literature heuristics supports the superiority of our method. The computational time of our heuristic is 0.75 % of the Branch and Bound Method. We also apply our heuristic to a case study involving the location of emergency vehicles (ambulances) in Perth City (Australia). © 2012 Operational Research Society of India.