LOCATING FACILITIES

• IN THE REGION AND COUNTRY

– Availability skills and productivity of workforce
– Local and national government policies, regulations, grants and attitudes
– Political stability
– Economic strength and trends
– Climate and attractiveness of locations
– Quality of life – including health, education, welfare and culture
– Location of major suppliers and markets
– Infrastructure particularly transport and communications
– Culture and attitudes of people
• IN THE CITY OR AREA
– Population and population trends
– Availability of sites and development issues
– Number, size and location of competitors
– Local regulations and restrictions on operations
– Community feelings
– Local services, including transport and utilities
 LOCATING FACILITIES
• IN THE SITE
– Amount and type of passing traffic
– Ease of access and parking
– Access to public transport
– Organizations working nearby
– Total cost of the site
– Potential for expansion or change.
 LOCATING FACILITIES
• STEPS IN SCORING MODEL
•
1. STEP NUMBER ONE { DECIDE THE RELEVANT FORTS IN A DECISION }
2. STEP NUMBER TWO {GIVE EACH FACTOR A MIXIMUM POSSIBELE
SCORE THAT SHOWS ITS IMPORTANCE}
3. STEP NUMBER THREE { CONSIDER EACH LOCATION IN TURN AND
GIVE AN ACTUAL SCORE FOR EACH FACTOR, UP TO THIS MAXIMUM
4. STEP NUMBER FOUR { ADD THE TOTAL SCORE AND EACH LOCATION
AND FIND THE HIGHEST
5. STEP NUMBER 5 {DISCUSS THE RESULT AND MAKE A FINAL DECISION}
 FACTORS Max score A B C D E

CLIMATE 10 8 6 9 7 5

INFRASCTURE 20 12 16 15 8 13

ACCESSIBILITY 10 6 8 7 9 9

CONSTRUCTION COST 5 3 1 4 2 1

COMMUNITY ATTITUDE 10 6 8 7 4 8

GOVERNMENTS VIEWS 5 2 2 3 4 3

CLOSENESS TO SUPPLIERS 15 10 10 13 13 10

CLOSENESS TO CUSTOMERS 20 12 10 15 17 10

AVAILABILITY OF WORKFORCE 5 1 2 4 5 3
 LOCATING FACILITIES

HYPOTHICAL SCENARIO OR EXAMPLE

Dynea Pakistan delivers goods to eight towns,

with locations and demands as shown in Figure
5.12. They wants to find the location for the
logistics centre that minimizes the average
delivery time t o these towns. Where should they
start looking?
 MAP OF DYNEA PROBLEMS
20 10
8
DI GO
9
Weight
10 15
14 14
AL BE
7
location
Distance –

8 EN HT
22
5 15
20

CP 6

25 6 FR
10
Solution
This is a single median problem, so we start with a
matrix showing the minimum distances between each
town, as shown in figure 5.13. This matrix also shows
the weight to be moved in column B. if we take one
column, say C, this shows the distance from a centre
located in AL to each other town. If we multiply this
distance by the corresponding weight
in column B, we get the weight-distance for each town.
Then adding these down the column gives the total
weight- distance for a logistics centre in AL, shown in
Row 12.
Solution continued
Weight distance of a centre at AL=(10x0) + (15x15) +
(25x22) + (20x24) + (20x31) + (10x28) + (10x32) +
(15x36) = 3015

Repeating this calculation for each of the other

towns allows us to compare the costs across Row
12. As you can see, town EN has the lowest total
cost, and is the single median, Dynea should start
looking for a location around this town.
 A B C D E F G H I J
1
2 Weight AL BE CP DI EN FR GO HT
3 AL 10 0 15 22 24 31 28 32 36
4 BE 15 15 0 8 9 16 14 17 21
5 CP 25 22 8 0 17 12 6 25 17
6 DI 20 24 9 17 0 7 13 8 12
7 EN 20 31 16 12 7 0 6 15 5
8 FR 10 28 14 6 13 6 0 21 11
9 GO 10 32 17 25 8 15 21 0 14
10 HT 15 36 21 17 12 5 11 14 0
11
12 Totals 125 3015 1475 1485 1330 1275 1395 2080 1690

Figure 5.13 Spreadsheet of calculations for lan Bruce

EXAMPLE

Figure 5.14 shows part of a road network,

with the travel time (in minutes) shows on
each link. Where would you locate a
depot to give best customer service? How
many depots would be needed to give a
maximum journey of 15 minutes?
 J

3
3

I
10
E

6
6
4

15
G

C
15

H
14

10
15
B

D
10

10
A
Road net work showing travel time in minutes between
locations
Solution
We could, of course, do the calculations for this
covering problem, finding the maximum time for each
town and identifying the best, and then finding the
combination of towns that gives service times less than
15 minutes. There is no need for this, as a lot of soft-
ware solves network problems and Figure 5.15 shows a
printout from a simple package. As you can see, if a
single location is needed the package recommends
town C, giving a maximum journey of 25 minutes. If this
is too much, facilities at A and I will reduce the
maximum journey to 15 minutes.
 A B C D E F G H H J K
Covering
1 problem
2
Distance
3 Matrix
4
5 A B C D E F G H I J
6 A 0 10 24 10 29 29 25 20 35 32
7 B 10 0 14 20 19 19 15 30 25 22
8 C 24 14 0 15 11 5 15 25 11 14
9 D 10 20 15 0 26 20 30 10 25 29
10 E 29 19 11 26 0 6 4 23 8 3
11 F 29 19 5 20 6 0 10 21 6 10
12 G 25 15 15 30 4 10 0 27 12 7
13 H 20 30 25 10 23 21 27 0 15 20
14 I 35 25 11 25 8 6 12 15 0 5
15 J 32 22 14 29 3 10 7 20 5 0
16 Maximum 35 30 25 30 29 29 30 30 35 32
17
18 Single location C
19 Maximum time 25
20
21 Two Location A I
22 A 0
23 B 10
24 C 11
25 D 10
26 E 8
27 F 6
28 G 12
29 H 15
30 I 0
31 J 5
32 Maximum time 10 15