Beruflich Dokumente
Kultur Dokumente
LOCATION SELECTION
Abhinav Parmar
Akshit Sobti
Ankur Verma
Bhupesh Singh
Jasdeep Bedi
INTRODUCTION
• United parcel service, Inc. (UPS) is a package delivery
company.
• DOMESTIC PACKAGE
• INTERNATIONAL PACKAGE
• Quality of life
• Services
• Attitudes
• Taxes
• Environmental regulations
• Utilities
• Developer support
Site Related Factors
• Land
• Transportation
• Environmental
• Legal
Multiple Plant Strategies
• Product plant strategy
• Market area plant strategy
• Process plant strategy
LOCATION ANALYSIS
CENTER OF GRAVITY APPROACH
Finds location of distribution center
that minimizes distribution costs
Considers
Location of markets
Volume of goods shipped to those
markets
Shipping cost (or distance)
Location
Center of Gravity Approach
Census Population
Tract (x, y) (l) lx ly
A (2.5, 4.5) 2 5 9 x* =
B (2.5, 2.5) 5 12.5 12.5
C (5.5, 4.5) 10 55 45
D (5, 2) 7 35 14 y* =
E (8, 5) 10 80 50
F (7, 2) 20 140 40
G (9, 2.5) 14 126 35
Totals 68 453.5 205.5
Location
Center of Gravity Approach
Census Population
Tract (x, y) (l) lx ly
453.5
A (2.5, 4.5) 2 5 9 x* =
68
B (2.5, 2.5) 5 12.5 12.5
C (5.5, 4.5) 10 55 45 205.5
D (5, 2) 7 35 14 y* = 68
E (8, 5) 10 80 50
F (7, 2) 20 140 40
G (9, 2.5) 14 126 35
Totals 68 453.5 205.5
Location
Center of Gravity Approach
Census Population
Tract (x, y) (l) lx ly
453.5
A (2.5, 4.5) 2 5 9 x* =
68
B (2.5, 2.5) 5 12.5 12.5
C (5.5, 4.5) 10 55 45 205.5
D (5, 2) 7 35 14 y* = 68
E (8, 5) 10 80 50
F (7, 2) 20 140 40
G (9, 2.5) 14 126 35
Totals 68 453.5 205.5
Location
Center of Gravity Approach
Census Population
Tract (x, y) (l) lx ly
A (2.5, 4.5) 2 5 9 x* = 6.67
B (2.5, 2.5) 5 12.5 12.5
C (5.5, 4.5) 10 55 45
D (5, 2) 7 35 14 y* = 3.02
E (8, 5) 10 80 50
F (7, 2) 20 140 40
G (9, 2.5) 14 126 35
Totals 68 453.5 205.5
Location
Center of Gravity Approach
Location
Break-Even Analysis
Location
Break-Even Analysis
$62 (20,000)
Location
Break-Even Analysis
for 20,000 units
1400
1200
1000
800
600
400
200
0
2 4 6 8 10 12 14 16 18 20 22
Q (thousands of units)
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
Location
A
B
$150,000
$300,000
$1,390,000
$1,060,000 Break-Even Analysis
C $500,000 $ 980,000
1600
D $600,000 $1,200,000 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800
600
400
200
0
2 4 6 8 10 12 14 16 18 20 22
Q (thousands of units)
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
Location
A
B
$150,000
$300,000
$1,390,000
$1,060,000 Break-Even Analysis
C $500,000 $ 980,000
1600
D $600,000 $1,200,000 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800
600
Break-even
400
point
200
A best
0
2 4 6 8 10 12 14 16 18 20 22
Q (thousands of units)
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
Location
A
B
$150,000
$300,000
$1,390,000
$1,060,000 Break-Even Analysis
C $500,000 $ 980,000
1600
D $600,000 $1,200,000 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Q (thousands of units)
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
Location
A
B
$150,000
$300,000
$1,390,000
$1,060,000 Break-Even Analysis
C $500,000 $ 980,000
1600
D $600,000 $1,200,000 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best C best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Q (thousands of units)
Location
Break-Even Analysis
1600 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best C best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Q (thousands of units)
Location
Break-Even Analysis
1600 A
Annual cost (thousands of dollars)
(20, 1390)
1400
(20, 1200) D
1200 Break-Even Quantities
(20, 1060) B
C
1000
(A) (B)
(20, 980)
800 $150,000 + $62Q Break-even
= $300,000 + $38Q
point
600 Q = 6,250 units
Break-even
400 (B) (C)
point
200 $300,000 + $38Q = $500,000 + $24Q
A best B best C best units
Q = 14,286
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Q (thousands of units)
Location
Transportation Method
Setting up the Initial Tableau
Create a row for each plant and a column for each warehouse
Warehouse
Plant
1 2 3
Phoenix
Atlanta
Location
Transportation Method
Setting up the Initial Tableau
Add a column for plant capacities and a row for warehouse demand
Warehouse
Plant Capacity
1 2 3
Phoenix 400
Atlanta 500
900
Requirements 200 400 300 900
Location
Transportation Method
Setting up the Initial Tableau
Insert costs into the shipping route option cells
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40
Phoenix 400
900
Requirements 200 400 300 900
Location
Transportation Method
Interpreting the Optimal Solution
LOCATION-SELECTION OF LOGISTICS
DISTRIBUTION CENTER
GEOGRAPHIC INFORMATION SYSTEMS
(GIS)
New tool to help in location analysis
Enables more complex demographic
analysis
Available data bases include
Detailed census data
Detailed maps
Utilities
Geographic features
Locations of major services
Geographic Information Systems
(GIS)
CHARACTERISTICS OF GIS
2. Graphics: Not only outputting all factor diagrams for users, but also outputting all kinds of
specific diagram with the requirements of users.
4. Network analysis: Geographic analysis and model-making of geographic net work (such as
traffic network) and city infrastructure network (such as water supply and drain network).
FUNCTIONS OF UPS DISTRIBUTION
SYSTEM BASED ON GIS
1. Vehicle and goods tracking With the help of GPS and electronic
map, the system can show the actual position of vehicles and
goods anytime, and can inquire the state of the vehicles and
goods, which is convenient to dispatch and manage
International
Logistics and Trade Small Air Ocean Customer
Distribution Management Package Freight Freight Service
3
High Margin
5 Merchandise
High Velocity
Time in Transit
6
Merchandise
Geography
7
Seasonal
Demand
Margin
16 Seasonal
26 Merchandise
28 Replenishment
40 Merchandise
Shelf Life
Different Modes Incur Different Opportunity Costs
While air to ocean mode shift can reduce some specific freight expenditures, it
incurs other total distribution costs which must be factored in.
Number of days
Client DC Client
Supplier Origin DC De-Consol Pooler
Network Stores
Supplier
Ocean Freight
Client DC Client
Supplier Origin DC De-Consol Pooler
Network Stores
Supplier
Ocean Freight + Small Package Hybrid
PICKUP /
CONSOLIDATE
SHIPMENTS
Point-to-point system
Hub-and-spoke
DEFINITION OF A HUB
1. A hub for logistics is a major warehouse which has
direct service to many other modes of transport.
60
UPS' Parcel Network is based on a
hub and spoke model
UPS operates centres that feed parcels to hubs where parcels are sorted
and forwarded to their destinations. Centers typically are the point of
entry for parcels and send the parcels to one or more hubs. A hub is a
location where many centers send packages to be sorted and sent back
out to other centers or hubs.
Centers feed packages to facilities at airports (called gateways), which in turn
send them to an air hub to be sorted and put on another plane to a final
destination gateway, and then from there to a center. For instance, a package
traveling from Seattle, Washington to Atlanta, Georgia, would be loaded onto
an air container at Boeing Field just south of Seattle and flown to the UPS Air
Hub at Chicago Rockford International Airport in Rockford, Illinois. From there
it would be sorted to a container heading to Atlanta to Hartsfield-Jackson
International Airport, and taken by truck from the airport to the delivery
center.
BENEFITS
• The small number of routes generally leads to more efficient use of
transportation resources. For example, aircraft are more likely to fly at full
capacity, and can often fly routes more than once a day.
• Route scheduling is complicated for the network operator. Scarce resources must be used carefully to
avoid starving the hub. Careful traffic analysis and precise timing are required to keep the hub operating
efficiently.
• The hub constitutes a bottleneck or single point of failure in the network. Total cargo capacity of the
network is limited by the hub's capacity. Delays at the hub can result in delays throughout the network.
Delays at a spoke can also affect the network.
• Cargo must pass through the hub before reaching its destination, requiring longer journeys than direct
point-to-point trips. This trade-off may be desirable for freight, which can benefit from sorting and
consolidating operations at the hub, but not for time-critical cargo and passengers.
Thank You !