Locating Tax Facilities: A Graphics-Based Microcomputer Optimization Model

This paper presents a mathematical model that selects locations for Internal Revenue Service Posts-of-Duty. The system is microcomputer-based and uses menus and graphically displayed zip code maps of IRS districts for interactive inputs and solution outputs. The mathematical model used for this problem is the uncapacitated, fixed charge, location-allocation model which minimizes travel and facility costs, given a specified level of activity. A greedy-interchange heuristic is used to obtain "good" solutions to the problem and is coupled with a lagrangian-relaxation technique providing a measure of how far from optimality the current solution can be. An example with Florida data illustrates the use of the model.