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Facility Location
OPS 370
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Where Would You Locate?
Amusement Park
Pharmacy Distribution Center
Chemical Plant
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Facility Location
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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
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Factors for Heavy & Light Manufacturing
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Factors for Warehouse & DC
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Factors for Retail & Service
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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
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Center-of-Gravity Heuristic
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Center-of-Gravity Heuristic Formulas
where,x, y = coordinates of the new facility at center of gravityxi, yi = coordinates of supplier or customer iVi = annual load weight shipped from supplier or to customer i
n
Vi
i = 1
xi Vi
i = 1
n
x =n
Vi
i = 1
yiVi
i = 1
n
y =
x1 x2 x3 x
y2
y
y1
y3
1 (x1, y1), l1
2 (x2, y2), l2
3 (x3, y3), l3
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Center-of-Gravity Example
CustomerA B C D
xi 200 100 250 500yi 200 500 600 300Vi 75 105 135 60
y
700
500
600
400
300
200
100
0 x700500 600400300200100
A
B
C
D
(135)
(105)
(75)
(60)
Miles
Mil
es
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Center-of-Gravity Example
x = = =n
Vii = 1
xiVii = 1
n
n
Vii = 1
yilii = 1
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
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Center-of-Gravity Example
A B C D
xi 200 100 250 500yi 200 500 600 300Vi 75 105 135 60
y
700
500
600
400
300
200
100
0 x700500 600400300200100
A
B
C
D
(135)
(105)
(75)
(60)
Miles
Mil
es
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Location Factor Rating
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Location Factor Rating Example
Factor WeightSite Scores Weighted Score
1 2 3 1 2 3
Labor Market 30 4 3 5 120 90 150
Utilities 20 5 4 4 100 80 80
Road Access 20 3 5 4 60 100 80
Rail Access 15 4 4 4 60 60 60
Community 15 3 4 5 45 60 75
Total 385 390 445
• Evaluate three different sites