FACILITY LOCATION

MODELS

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Location Models
A. Qualitative Model
i) Weighted Rating Method (Point rating)

Identify important factors Weight factors (0.00 - 1.00) Subjectively score each factor (0 - 100) Sum weighted scores

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Location Models
I. Qualitative Model

Example:
Relevant Factors Assigned weight A
Production cost

Scores for Locations B 40 80 70 70 60 90 C 60 80 60 40 70 80 D 30 60 50 80 90 50

Raw material supply

Labour availability Cost of living Environment Markets

0.35 0.25 0.20 0.05 0.05 0.10

50 70 60 80 50 70

1.0
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ii) Factor Rating Method

i) Factor Rating Method Identify important factors Factor Rating (0 - 5) Location Rating (0 - 10) Product Rating Sum product scores
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.

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Example:
Location Rating Factor 1. Tax advantage 2. Suitability of labour skill 3. Proximity to customers Factor Rating 4 3 3 5 1 5 Location A 8 2 6 2 3 4 Location B 6 3 5 4 3 3 Product of Rating Location A 32 6 18 10 3 20 Location B 24 9 15 20 3 15

4. Proximity to suppliers
5. Adequacy of water 6. Receptivity of community 7. Quality of education system 8. Access to rail and transportation 9. Suitability of climate

3 2 2

10 7 6

8 9 4 Total score

30 14 12 149

24 18 8 144

10. Availability of power

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B. Quantitative Model
i) Center-of-Gravity Technique

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

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Grid-Map Coordinates
y 2 (x2, y2), W2
x=

i=1

xiWi y=

i=1

yiWi

y2 1 (x1, y1), W1

y1
i=1

Wi

i=1

Wi

y3

3 (x3, y3), W3

where, x, y = coordinates of the new facility at center of gravity xi, yi = coordinates of existing facility i Wi = annual weight shipped from facility i

x1
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x2

x3

x
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Center-of-Gravity Technique
y 700

C
600 500 Miles 400 300 200 100 0

B (105)

(135)

x y Wt

A 200 200 75

B 100 500 105

C 250 600 135

D 500 300 60

D A (75) (60)

100 200 300 400 500 600 700 x Miles

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Center-of-Gravity Technique
A B C D n x 200 100 250 500 700 xiWi C (200)(75) + (100)(105) + (250)(135)500 + (500)(60) y 200 600 300 i=1 600 x= = (135) Wt 75 135 = 23860 75 + 105 + 135 + 60 105 n B 500 Wi (105)
y Miles
i=1

400
n 300

D
yiWi

200 1 i= y= 100 n 0

(60)

i=1

Wi

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

100 200 300 400 500 600 700 x Miles

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Example S5.2

Center-of-Gravity Technique
y 700

C
600 500 Miles 400 300 200 100 0

B (105)

(135)

x y Wt

A 200 200 75

B 100 500 105

C 250 600 135

D 500 300 60

Center of gravity (238, 444) D (60)

(75)

100 200 300 400 500 600 700 x Miles

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Centroid method example

Several automobile showrooms are located according to the following grid which represents coordinate locations for each showroom
Y Q
(790,900)

S ho wro o m

D
(250,580)

No o f Z-Mo b ile s s o ld p e r mo nth 1250 1900 2300

A
(100,200)

A D

(0,0)

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Question: What is the best location for a new Z-Mobile warehouse/temporary storage facility considering only distances and quantities sold per month?

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Economic Analysis Method

Particulars

Site

i) Total Investments in land, building, Plant & m/c (Rs.0000) ii) Revenues (0000) iii) Expenses on raw materials (0000) iv) Distribution cost (0000) v) Expenses on utilities (0000) vi) Wages & Salaries

A 250
410 89 40 50 25

B 325
515 100 60 40 30

C 270
360 98 25 25 28

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Median Model
Facility (F) Coordinates of Location Cost of moving one unit by unit distance (Rs) Annual load (L) Units

Bareilly
Shahjanpur Gonda Kanpur Sultanpur

(10, 80)
(30, 60) (80, 50) (50, 10) (80, 10)

10
10 10 10 10

452
678 483 711 539 ----------------------------2863 -----------------------------

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13

Load-Distance Technique

Compute Load x Distance for each site Choose site with lowest Load x Distance Distance can be actual or straight-line

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Load-Distance Calculations
LD =
where, LD = li di di = = = the load-distance value the load expressed as a weight, number of trips or units being shipped from the proposed site and location i the distance between the proposed site and location i (xi - x)2 + (yi - y)2

ld
i

i=1

where, (x,y) = coordinates of proposed site (xi , yi) = coordinates of existing facility
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Load-Distance Example
Potential Sites Site X 1 360 2 420 3 250 Y 180 450 400 X Y Wt A 200 200 75 Suppliers B C 100 250 500 600 105 135 D 500 300 60

Compute distance from each site to each supplier Site 1 dA = dB = (xA - x1)2 + (yA - y1)2 = (200-360)2 + (200-180)2 = 161.2 (100-360)2 + (500-180)2 = 412.3

(xB - x1)2 + (yB - y1)2 =

dC = 434.2
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dD = 184.4
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Load-Distance Example
Site 2 dA = 333 dB = 323.9 dC = 226.7 dD = 170 dD = 269.3 Site 3 dA = 206.2 dB = 180.4 dC = 200

Compute load-distance

LD =

ld
i

i=1

Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063 Site 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

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Exhibit S5.3

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Location Analysis

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