Beruflich Dokumente
Kultur Dokumente
2
Topic 2
Facility Location: Quantitative and
Qualitative Methods
Session 2
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2 Operations Software
POM/QM For Windows (Production and Operation Management/Quantitative Methods) is an
academic software that allows to perform various useful analyzes for the course of Facilities
Design.
There are two versions, Excel QM (a complement for the spreadsheet) and QM for Windows.
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Therefore, the decision becomes a Multi-Stages and Multi-Decisions problem, through which
the most optimal option can be reached.
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The selection of appropriate sites for an installation includes many researchers, including
geographers, economists, town planners, etc. that in some cases, shows a gradual change from
quantitative models to qualitative models and eventually to diffuse models used in the
selection of the most appropriate site.
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Thunen's Theory of the Least Cost of The location was selected on the basis of the value of the installation in the market, and the distance
Location from the market.
It includes the cost of transportation, labor and concentration of industries. It calculates indexes of
Weber's Theory of Location
materials, labor, among others, although it excludes the costs of the land, depreciation.
The Losch Theory of Maximum Profit
The location is selected using a measure of earnings more than the cost incurred
for Localization
Transportation Problem Solution Operations Research for the allocation of plants, which includes transportation costs between them.
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1. Determine the relevant factors (requirement of the intervention of experts in each case).
2. Assign a weight to each factor to indicate its relative importance compared to others.
3. Consider the alternative regions and collect the information of each of them.
4. Decide on a rating scale for the alternatives (from 1 to 100 for example).
5. Evaluate each of the location alternatives in each factor.
6. Multiply the weight of the factor by the rating of each alternative and totalize.
7. Choose the alternative that obtained the highest total score.
3
2 Rating (1 to 100) Weighted Scores
Factors Weight In Palmira In Buga Palmira Buga
Closeness to the existing store 0,10 100 60 0,1(100)=10 0,1(60)=6
Traffic volume 0,05 80 80 0,05(80)=4
5 0,05(80)=4
1 Lease costs 0,40 70 90 0,4(70)=28 0,4(90)=36
Size 0,10 86 4 92 0,1(86)=8,6 0,1(92)=9,2
Distribution 0,20 40 70 0,2(40)=8 0,2(70)=14
Operating costs 0,15 80 90 0,15(80)=12 0,15(90)=13,5
1,00 70,6 82,7 6
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3. Write the names of the Factors and the Alternatives; Indicate the
weights and the ratings for each alternative:
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You will find a minimized window with the results of the multiplication between the factors and
the rating:
You can use the modules in the same
way:
• Decision Analysis
• Factor Rating
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Each participant is asked to evaluate the importance of each criterion with respect to the others.
Voters: CRITERIA
Normalized
Total Rows
Durability
Functions
Design
Value
Value
Size
3
𝟕
𝒙𝟏𝟎𝟎 = 𝟐𝟑, 𝟑%
Size 1 2 3 1 7 23,3% 𝟑𝟎
CRITERIA
Design 2 3 2 1 8 26,7%
Value 1 0 1 2 4 13,3%
Functions 0 1 2 1 4 13,3%
Durability 2 2 1 2 7 23,3%
Total 30 100,0%
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Assign each criterion a value of importance (eg. between 1 and 5 or 10) to qualify the available options
𝟒 𝟐 𝒙 𝟎, 𝟐𝟏 = 𝟎, 𝟒𝟐
𝒙 𝟏𝟎𝟎 = 𝟐𝟏%
𝟏𝟗
Standardized
Normalized
Priority
Priority
Value
Size 23,3% 4,00 0,21 1,00 0,21 2,00 0,42 3,00 0,63 4,00 0,84
Design 26,7% 5,00 0,26 4,00 1,05 3,00 0,79 2,00 0,53 1,00 0,26
CRITERIA
Value 13,3% 3,00 0,16 1,00 0,16 2,00 0,32 3,00 0,47 4,00 0,63
Functions 13,3% 3,00 0,16 4,00 0,63 3,00 0,47 2,00 0,32 1,00 0,16
Durability 23,3% 4,00 0,21 1,00 0,21 3,00 0,63 2,00 0,42 4,00 0,84
2,74 100% 19 1,00 2,26 2,63 2,37 2,74
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Qualify the criteria that students consider the most important when it comes to selecting a new cell phone.
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This analysis can be done both numerically and graphically. The graphical alternative is more
understandable given that it shows the ranges in which the alternatives are better or no
compared with others6.
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3. Write the names of the Options; Indicate the Fixed Costs, the Variable Costs and the Volume
for the analysis (Volume Analysis):
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2 Transportation Method
It is a special quantitative model of Linear Programming applied to problems that involve the
movement of products from various sources to various destinations.
Recommended! An easy and fast way to draw on geographical maps, very useful to
represent in logistics or operations management the location of
production centers, distribution, port terminals, airports, road
infrastructure, etc.
You can generate PNG images of 450 x 450 pixels or capture the screen to
incorporate into your reports. Does not require installation.
https://www.scribblemaps.com
1. Cali (Google Maps)
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2 Transportation Method
Example3: BARRANQUILLA
A pharmaceutical company has 4 factories that offer
four distribution centers of its main customers. The
Industrial Engineer in chief wants to determine the
minimum monthly cost of dispatches possible for his
customers. The capacity of its factories, the demand of
the distribution centers and the dispatch costs for Montería
each case, are shown in the following table:
Cúcuta
UNIT DISPATCH COSTS (Thousands)
To To To To
From
Pereira Popayán Cúcuta Montería
Barranquilla 25 35 36 60
Medellín 55 30 25 25 MEDELLÍN
Cali 40 50 80 90
Bogotá 30 40 66 75
Distribution
Capacity Demand BOGOTÁ
Factory Center Pereira
(Ton) (Ton)
(Customers)
Barranquilla 15 Pereira 10
Medellín 6 Popayán 12
Cali 14 Cúcuta 15
Bogotá 11 Montería 9
CALI
Popayán
Read
Designed in : www.scribblemaps.com
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2 Transportation Method
1. In QM For Windows select the Transport module.
2. Indicate the Title, Number of Origins and Number of Destinations and
press Ok.
3. Write the names of the Origins in the rows and the Destinations in the columns, complete
the respective cost information, the respective Capacity (Supply) and Demand:
Options:
Minimize
Any Method
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2 Transportation Method
4. Push on the Solve button.
Dispatch Plan
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2 Transportation Method
Mathematical model:
f = Sources from 1 a n
d = Destinations from 1 a m
C fndm = Cost to dispatch from Source n to Destination m
Q fndm = Quantity to be dispatched from Source n to Destination m
P fn = Maximum production (capacity) of the Source n
D dm = Demand of Destination m
Objective function : Minimize the total cost of dispatching Q quantities from the sources f to the destinations
d, according to the respective Costs C.
𝒇=𝒏 𝒅=𝒎
Constraints:
P fn = Maximum production (capacity) of the Source n
D dm = Demand of Destination m
Activity 2: Solve it in Excel Solver and in QM / POM for Windows module Linear Programming.
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In our case, it is useful to decide the location of Distribution Centers to minimize distribution costs.
This method considers distribution costs as a linear function of distance and quantity sent. It is
assumed that the amounts are constant. The use of scale maps is required to accurately locate the
different sites.
If the same amount is send to all destinations: If you dispatch different units to all destinations:
Where: Where:
xi = coordinate x for destination i Qi = amount to be shipped to destination i
yi = coordinate y for destination i xi = coordinate x for destination i
n = number of destinations yi = coordinate y for destination i
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1. Assign a relative value to each Target Factor (FOi) for each viable location option i.
2. Estimate a relative value of each Subjective Factor (FSi) for each viable option of location i.
3. Combine Objective and Subjective Factors, assign to a relative weighting to obtain a Location Preference
Measurement (LPM).
4. Select the location that obtains the maximum Location Preference Measurement.
These factors are quantified in the terms of Costs that allow determining the Annual Total Cost of each Ci
location. FOi is determined by multiplying Ci by the sum of the reciprocal (inverse) costs of each place and
then take the reciprocal of the result:
−1
1
𝐹𝑂𝑖 = 𝐶𝐹𝑖
𝐶𝐹𝑖𝑛
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1. Determine a qualification Wj for each location (j = Location 1, 2, …. n), with respect to the total of that
same factor.
2. Give a score Rij for each factor according to the scores for the factor in this location but on the total
factors for it.
3. For each location, combine the qualification of the factor Wj with its hierarchical order Rij, to determine
the Measure of the Subjective Factor:
𝐹𝑆𝑖 = 𝑅𝑖𝑗 × 𝑊𝑗
A relative importance k and (1-k) must also be assigned to the Objective and Subjective Factors:
Spreadsheet
Brown and Gibson method
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Three possible places to build a new facility have been identified. As the quantitative factors have been
identified with the following costs:
Raw
Location Transport Workforce Energy Taxes Total Cost −1
material
North 100 50 100 80 100 430 1
Center 90 80 80 90 80 420 𝐹𝑂𝑖 = 𝐶𝐹𝑖
South 80 100 70 100 60 410
𝐶𝐹𝑖𝑛
−1
1 1 1
𝐹𝑂𝑁𝑜𝑟𝑡ℎ = 430 + + = 0,325458325
430 420 410
−1
1 1 1
𝐹𝑂𝐶𝑒𝑛𝑡𝑒𝑟 = 420 + + = 0,333207334
430 420 410
−1
1 1 1
𝐹𝑂𝑆𝑜𝑢𝑡ℎ = 410 + + = 0,341334341
430 420 410
≅1
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0,7
𝑾𝑛𝑜𝑟𝑡ℎ 𝑓𝑜𝑟 𝐾1 = 2,0 = 𝟎, 𝟑𝟓𝟎
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2 Review Activity
Scan this code with your phone and follow the instructions of the teacher
You can visit manually at: www.alexanderaragon.co, link "courses" and press "Class Activity“
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2 Review Activity
One of following Localization Methods, is not quantitative:
B Transportation Method.
Click on an
answer:
C Break-even Analysis Method.
D Centroid method.
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2 Review Activity
One of the following is not a Quantitative Factor:
A Transportation Costs.
B Local Taxes.
Click on an
answer:
C Labor costs.
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2 Glossary
Incorporate on this Glossary page, at least 5 terms used in this session, with their respective definitions:
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2 Supplementary notes
Review Workshop 1
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2 References Session 2:
1. MUTHER, Richard & HALES, Lee. Systematic Layout Planning. Management & Industrial Research Publications. Marietta. GA, USA. 2015. 416 p.
2. KAPOOR, Vikas et al. Location Selection – A Fuzzy Clustering Approach. International Journal of Fuzzy Systems, Vol. 10, No. 2, June 2008. p. 123
3. CHASE, Richard et al. Operations Management for Competitive Advantage. McGraw-Hill Higher Education, 2000 - 864 p.
4. INNOVA FORUM. Creatividad e Innovación. Técnicas. http://www.innovaforum.com/indice.htm
5. STARKE, Barry W. & SIMONDS, John O. Landscape Archtecture. A manual of environmental planning and design. Mc Graw-Hill Education. 5th Ed. 2013, 430 p.
6. STEVENSON, William J. Operations Management. McGraw-Hill Irwin. 7 ed. 2012. 945 p.
7. ABARCA, Javier; BEDAR, Al; CARLSON, Denise, et al. Introductory Engineering Design: A Projects-Based Approach. University of Colorado. 2000.
8. RENDER, Barry & HEIZER, Jay. Administración de la Producción. Pearson Educación, México. 2007. 472 p.
9. CARRO P. Roberto & GONZALEZ G. Daniel. Administración de las Operaciones. Localización de Instalaciones. Facultad Ciencias Económicas y Sociales. Universidad Nacional
del Mar del Plata. 2013. 25 p.
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