Optimizing Server Locations for Stochastic Emergency Service Systems

This paper presents a new model for solving the optimal server location problem in a stochastic system that accounts for unit availability, heterogeneity, and interdependencies. We show that this problem is NP-hard and derive both lower and upper bounds for the optimal solution by leveraging a special case of the classic $p$-Median problem. To overcome the computational challenges, we propose two Bayesian optimization approaches: (i) a parametric method that employs a sparse Bayesian linear model with a horseshoe prior (SparBL), and (ii) a non-parametric method based on a Gaussian process surrogate model with $p$-Median as mean prior (GP-$p$M). We prove that both algorithms achieve sublinear regret rates and converge to the optimal solution, with the parametric approach demonstrating particular effectiveness in high-dimensional settings. Numerical experiments and a case study using real-world data from St. Paul, Minnesota emergency response system show that our approaches consistently and efficiently identify optimal solutions, significantly outperforming the $p$-Median solution and other baselines.