1. Facility Location OPS 370

2. Where Would You Locate? Amusement Park Pharmacy Distribution Center Chemical Plant

3. Facility Location

5. Types of Facilities 1. Heavy Manufacturing – Ex. Auto plants, steel mills, chemical plants 2. Light Manufacturing – Ex. Electronics assembly 3. Warehouse & Distribution Centers 4. Retail & Service Facilities

6. Factors for Heavy & Light Manufacturing

7. Factors for Warehouse & DC

8. Factors for Retail & Service

9. Location Analysis Techniques 1. Center-of-Gravity Heuristic – A. Identify a point that achieves low transportation cost based on straight line distances 2. Location Factor Rating – A. Compare and rate specific sites based on various factors

10. Center-of-Gravity Heuristic

11. Center-of-Gravity Heuristic Formulas where, x, y =coordinates of the new facility at center of gravity x i, y i =coordinates of supplier or customer i V i =annual load weight shipped from supplier or to customer i  n ViViViVi i = 1  x i V i i = 1 n x =  n ViViViVi i = 1  yiViyiViyiViyiVi n y = x1x1x1x1 x2x2x2x2 x3x3x3x3x y2y2y2y2y y1y1y1y1 y3y3y3y3 1 (x 1, y 1 ), l 1 2 (x 2, y 2 ), l 2 3 (x 3, y 3 ), l 3

12. Center-of-Gravity Example Customer ABCD Customer ABCD x i 200100250500 y i 200500600300 V i 7510513560 y700 500 600 400 300 200 100 0 x 700500600400300200100 A B C D (135) (105) (75) (60) Miles Miles

13. Center-of-Gravity Example x = = = n  ViVi i = 1  xiVixiVi n  n ViVi  yiliyili n y = = = (200 x 75) + (500 x 105) + (600 x 135) + (300 x 60) 75 + 105 + 135 + 60 (200 x 75) + (100 x 105) + (250 x 135) + (500 x 60) 75 + 105 + 135 + 60

14. Center-of-Gravity Example ABCD x i 200100250500 y i 200500600300 V i 7510513560y700500 600 400 300 200 100 0x700500600400300200100 A B C D (135) (105) (75) (60) Miles Miles

15. Location Factor Rating

16. Location Factor Rating Example FactorWeight Site ScoresWeighted Score 123123 Labor Market3043512090150 Utilities2054410080 Road Access203546010080 Rail Access1544460 Community15345456075 Total385390445 Evaluate three different sites