Landmark navigation is a common positioning method of material handling vehicles operating in industrial environments. This paper analyses the sensitivity of absolute positioning techniques aiming to improve the accuracy of the positioning method. An error sensitivity map (ESM), shows the critical zones where calculation is most sensitive to erroneous data. Using these zones combined with the accuracy required by the operational constraints, a non-linear optimization model is developed. This model is used to determine the position of the minimum number of beacons required by a shop floor to guarantee accurate and reliable performance of AGV's. The model is later converted to a binary linear programming model which is used as a lower bound to a heuristic solution procedure. Finally two examples are used to illustrate the procedure.