This paper surveys work done to date on the problem of laying out the facilities of some system in terms of specifying which activities are to be adjacent. Each pair of facilities has a closeness rating which represents the desirability that they are located adjacently. Ratings are usually proportional to the flow of goods or people between facilities. The aim of the layout analyst is to design a system so that the sum of the ratings of adjacent pairs is maximized as this represents travel saved. This paper formulates the layout problem and reviews exact and heuristic methods of solution. In the literature review special emphasis is placed on the newly-emerging graph-theoretic techniques which appear promising.