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FACILITY LOCATION

MODELS

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Identify important factors

Weight factors(0.00 - 1.00)

Subjectively score each factor(0- 100)

Sum weighted scores

Location ModelsA. Qualitative Model

i) Weighted Rating Method (Point rating)

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Location ModelsI. Qualitative Model

Example:

Relevant Factors Assignedweight

Scores for Locations

A B C D

Production cost

Raw material supply

Labour availability

Cost of living

Environment

Markets

0.35

0.25

0.20

0.05

0.050.10

50

70

60

80

5070

40

80

70

70

6090

60

80

60

40

7080

30

60

50

80

9050

1.0

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ii) Factor Rating Method

Table gives the various factors considered for location decision and the factor

ratings assigned to each factor based on its importance for location decision

and location rating for the location alternatives based on the merit of each

location in each of the factors considered.

i) Factor Rating Method

Identify important factors

Factor Rating (0 - 5)

Location Rating (0 - 10)

Product Rating

Sum product scores

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Example:

Factor Factor Rating

Location Rating Product of Rating

Location A Location B Location A Location B

1. Tax advantage 4 8 6 32 24

2. Suitability oflabour skill

3 2 3 6 9

3. Proximity tocustomers

3 6 5 18 15

4. Proximity to

suppliers

5 2 4 10 20

5. Adequacy ofwater

1 3 3 3 3

6. Receptivity ofcommunity

5 4 3 20 15

7. Quality ofeducationsystem

4 1 2 4 8

8. Access to rail andtransportation

3 10 8 30 24

9. Suitability ofclimate

2 7 9 14 18

10. Availability ofpower

2 6 4 12 8

Total score 149 144

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Locate facility at center of geographic area

Based on weight and distance traveled

Establish grid-map of area Identify coordinates

and weights shipped

for each location

B. Quantitative Model

i) Center-of-Gravity Technique

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Grid-Map Coordinates

where,x, y= coordinates of the new

facility at center of gravityx

i

, yi

= coordinates of existingfacility i

Wi= annual weight shipped fromfacility i

n

Wii =1

xiWii =1

n

x = n

Wii =1

yiWii =1

n

y =

x1 x2 x3 x

y2

y

y1

y3

1 (x1, y1), W1

2 (x2, y2), W2

3 (x3, y3), W3

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Center-of-Gravity Technique

A B C D

x 200 100 250 500y 200 500 600 300Wt 75 105 135 60

y

700

500

600

400

300

200

100

0 x700500 600400300200100

A

B

C

D

(135)

(105)

(75)

(60)

Miles

Miles

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Center-of-Gravity Technique

y

700

500

600

400

300

200

100

0 x700500 600400300200100

A

B

C

D

(135)

(105)

(75)

(60)

Miles

Miles

A B C D

x 200 100 250 500y 200 500 600 300Wt 75 105 135 60

Example S5.2

x= = = 238n

Wii =1

xiWii =1

n

n

Wii =1

yiWii =1

n

y= = = 444(200)(75) + (500)(105) + (600)(135) + (300)(60)

75 + 105 + 135 + 60

(200)(75) + (100)(105) + (250)(135) + (500)(60)

75 + 105 + 135 + 60

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Center-of-Gravity Technique

A B C D

x 200 100 250 500y 200 500 600 300Wt 75 105 135 60

y

700

500

600

400

300

200

100

0 x700500 600400300200100

A

B

C

D

(135)

(105)

(75)

(60)

Miles

Miles Center of gravity(238, 444)

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Question: What is the best location for a new Z-Mobilewarehouse/temporary storage facility considering only

distances and quantities sold per month?

Centroid method example Several automobile showrooms are located according to

the following grid which represents coordinate locations

for each showroom

S howroom No of Z-Mobile s

s old pe r month

A 1250

D 1900

Q 2300X

Y

A(100,200)

D(250,580)

Q(790,900)

(0,0)

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Economic Analysis Method

Particulars Site

A B Ci) Total Investments inland, building, Plant &m/c (Rs.0000)

ii) Revenues (0000)

iii) Expenses on rawmaterials (0000)

iv) Distribution cost(0000)

v) Expenses onutilities (0000)

vi) Wages & Salaries

250

410

89

40

5025

325

515

100

60

4030

270

360

98

25

2528

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Median ModelFacility (F) Coordinates Cost of moving one unit Annual load

of Location by unit distance (Rs) (L) Units

Bareilly (10, 80) 10 452

Shahjanpur (30, 60) 10 678

Gonda (80, 50) 10 483

Kanpur (50, 10) 10 711

Sultanpur (80, 10) 10 539

-----------------------------

2863-----------------------------

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Load-Distance

Technique Compute Load x Distance for each site

Choose site with lowestLoad x Distance

Distance can be actualor straight-line

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Load-Distance Example

Potential SitesSite X Y1 360 1802 420 450

3 250 400

SuppliersA B C D

X 200 100 250 500Y 200 500 600 300

Wt 75 105 135 60

Compute distance from each site to each supplier

= (200-360)2 + (200-180)2dA = (xA - x1)2 + (yA - y1)

2Site 1 = 161.2

= (100-360)2 + (500-180)2dB = (xB - x1)2 + (yB - y1)

2 = 412.3

dC = 434.2 dD = 184.4

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Load-Distance Example

Site 2 dA = 333 dC = 226.7dB = 323.9 dD = 170

Site 3 dA = 206.2 dC = 200dB = 180.4 dD = 269.3

Compute load-distance

i = 1

nli diLD =

Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,789

Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*

* Choose site 3

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Location Analysis

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Location Analysis

Exhibit S5.2

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Location Analysis

Exhibit S5.3

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Location Analysis