The relative location of facilities in a functional layout has been determined under the criterion of materials handling cost minimization. Recent advances in analytical methods have provided superior solutions within this criterion hut the validity of certain underlying assumptions must be questioned. Materials handling as a criterion is deficient for many facilities layout problems; yet a modified definition of "materials" may yield considerable insight to the improved location of people. Each layout problem is made unique by its particular assumptions, constraints, limitations, and the intrinsic activity of the components; a guide to establishing this uniqueness and to selecting appropriate tool3 for analysis is presented.