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Chapter 2 Basic Models for the Location Problem

Chapter 2 Basic Models for the Location Problem. Outline. 11.1 Introduction 11.2 Important Factors in Location Decisions 11.3 Techniques for Discrete Space Location Problems 11.3.1 Qualitative Analysis 11.3.2 Quantitative Analysis 11.3.3 Hybrid Analysis. Outline Cont.

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Chapter 2 Basic Models for the Location Problem

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  1. Chapter 2Basic Modelsfor theLocation Problem

  2. Outline • 11.1 Introduction • 11.2 Important Factors in Location Decisions • 11.3 Techniques for Discrete Space Location Problems • 11.3.1 Qualitative Analysis • 11.3.2 Quantitative Analysis • 11.3.3 Hybrid Analysis

  3. Outline Cont... • 11.4 Techniques for Continuous Space Location Problems • 11.4.1 Median Method • 11.4.2 Contour Line Method • 11.4.3 Gravity Method • 11.4.4 Weiszfeld Method

  4. 11.3.3 Hybrid Analysis • Critical • Objective • Subjective

  5. Hybrid Analysis Cont... CFij = 1 if location i satisfies critical factor j, 0 otherwise OFij = cost of objective factor j at location i SFij = numerical value assigned (on scale of 0-100) to subjective factor j for location i wj = weight assigned to subjective factor (0<w< 1)

  6. Hybrid Analysis Cont...

  7. Hybrid Analysis Cont... The location measure LMi for each location is then calculated as: LMi = CFMi [ OFMi+ (1- ) SFMi ] Where  is the weight assigned to the objective factor. We then choose the location with the highest location measure LMi

  8. Example 4: Mole-Sun Brewing company is evaluating six candidate locations-Montreal, Plattsburgh, Ottawa, Albany, Rochester and Kingston, for constructing a new brewery مصنع الجعة. There are two critical, three objective and four subjective factors that management wishes to incorporate in its decision-making. These factors are summarized in Table 7. The weights of the subjective factors are also provided in the table. Determine the best location if the subjective factors are to be weighted 50 percent more than the objective factors.

  9. Table 7:Critical, Subjective and Objective Factor Ratings for six locations for Mole-Sun Brewing Company, Inc.

  10. Table 7 Cont... Location Albany 0 1 Kingston 1 1 Montreal 1 1 Ottawa 1 0 Plattsburgh 1 1 Rochester 1 1 Factors Critical Water Supply Tax Incentives

  11. Table 7 Cont... Location Albany 185 80 10 Kingston 150 100 15 Montreal 170 90 13 Ottawa 200 100 15 Plattsburgh 140 75 8 Rochester 150 75 11 Factors Critical Objective Revenue Labor Cost Energy Cost

  12. Table 7 Cont... Location 0.3 0.4 Albany 0.5 0.9 Kingston 0.6 0.7 Montreal 0.4 0.8 Ottawa 0.5 0.4 Plattsburgh 0.9 0.9 Rochester 0.7 0.65 Factors Subjective Community Attitude Ease of Transportation

  13. Table 7Cont... Location 0.25 0.05 Albany 0.6 0.7 Kingston 0.7 0.75 Montreal 0.2 0.8 Ottawa 0.4 0.8 Plattsburgh 0.9 0.55 Rochester 0.4 0.8 Factors Subjective Labor Unionization Support Services

  14. Table 11.14 Location Analysis of Mole-Sun Brewing Company, Inc., Using Hybrid Method

  15. Table 11.14 Cont... Location Albany -95 0.7 0 Kingston -35 0.67 0.4 Montreal -67 0.53 0.53 Ottawa -85 0.45 0 Plattsburgh -57 0.88 0.68 Rochester -64 0.61 0.56 Factors LMi Critical Objective Subjective Sum of Obj. Factors SFMi

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