The arrangement in any physical layout is determined by the interrelationships among the activities. The number of possible arrangements is combinatorial and therefore gets very large as the number of activities increases modestly. Using the mathematics of graph theory, the upper bound to satisfying these interrelationships is developed. The zone of compromise is shown to be the area where the solutions to most practical layout problems are found. Comparisons are drawn to existing rules of thumb and a graphical summary presented.