A comparison continuous approximation with mathematical programming approach to location problems

Distribution system designers often need to answer the question: ‘How many terminals should be established, when a distribution system with transhipments is designed?’ There are two extremally different ways, how to estimate the economical-optimal number of the terminals. The first approach makes use of mathematical programming and solves the discrete problem by exact method based on branch and bound principle. The second approach tries to substitute the discrete subsets of customers assigned to one terminal by so-called influence area.