Abstract
The paper is concerned with a hierarchical or tree structure which has demand values associated with it. Following formulae originally used in information theory, new concepts of the capability of satisfying a demand, the balance of the set of demand values, and the dominance of a demand value are introduced. Criteria are developed to determine when a grouping of demand values is beneficial for increasing the balance and an algorithm is presented which gives an optimum method for grouping the demand values so that they are equalised as far as possible. The model is applicable in a variety of contexts where an organisation can be treated as a hierarchy. The demand values could be as varied as staffing levels, annual budget demand, requirement for computing facilities, estimate of programming time to develop the components of a computer software system, sales figures in individual geographical areas, and occurrence of strings of characters in keywords for information retrieval.
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