Chapter 08 – Location Planning and Analysis
8-11
Education.
8. Given: We are provided the location factors below for four different types of organizations.
Factor
Local bank
Steel mill
Food warehouse
Public school
Convenience for
customers
Attractiveness of
building
Nearness to raw
materials
Large amounts
of power
Pollution
controls
Labor cost and
availability
Transportation
costs
Construction
costs
Student answers will vary regarding how they rate the importance of each factor in terms of
making location decisions using L = low importance, M = moderate importance, and H = high
importance. One possible set of answers is given below.
Factor
Local bank
Steel mill
Food warehouse
Public school
Convenience for
customers
H
L
M–H
M–H
Attractiveness of
building
H
L
M
M–H
Nearness to raw
materials
L
H
L
M
Large amounts
of power
L
H
L
L
Pollution
controls
L
H
L
L
Labor cost and
availability
L
M
L
L
Transportation
costs
L
M–H
M–H
M
Construction
costs
M
H
M
M–H
Chapter 08 – Location Planning and Analysis
9. Given: We are given factors, weights, and factor rating scores for three locations. Scores range
from 1 – 100 (best).
Location Score
Factor
Wt.
A
B
C
Convenience
.15
80
70
60
Parking
.20
72
76
92
Display area
.18
88
90
90
Shopper traffic
.27
94
86
80
Operating costs
.10
98
90
82
Neighborhood
.10
96
85
75
1.00
Multiply the factor weight by the score for each factor and sum the results for each location
alternative.
Weight x Score
Factor
Wt.
A
B
C
Convenience
.15
.15(80) = 12.00
.15(70) = 10.50
.15(60) = 9.00
Parking
.20
.20(72) = 14.40
.20(76) = 15.20
.20(92) = 18.40
Display area
.18
.18(88) = 15.84
.18(90) = 16.20
.18(90) = 16.20
Shopper traffic
.27
.27(94) = 25.38
.27(86) = 23.22
.27(80) = 21.60
Operating costs
.10
.10(98) = 9.80
.10(90) = 9.00
.10(82) = 8.20
Neighborhood
.10
.10(96) = 9.60
.10(85) = 8.50
.10(75) = 7.50
1.00
87.02
82.62
80.90
Conclusion: Based on composite score, Location A seems to be the best.
8-13
Education.
10. Given: We are given factors, weights, and factor rating scores for three locations. Scores range
from 1 – 100 (best).
Location Score
Factor
Wt.
East #1
East #2
West
Initial Cost
8
100
150
140
Traffic
10
40
40
30
Maintenance
6
20
25
18
Dock space
6
25
10
12
Neighborhood
4
12
8
15
Multiply the factor weight by the score for each factor and sum the results for each location
alternative.
Weight x Score
Factor
Wt.
East #1
East #2
West
Initial Cost
8
8(100) = 800
8(150) = 1200
8(140) = 1120
Traffic
10
10(40) = 400
10(40) = 400
10(30) = 300
Maintenance
6
6(20) = 120
6(25) = 150
6(18) = 108
Dock space
6
6(25) = 150
6(10) = 60
6(12) = 72
Neighborhood
4
4(12) = 48
4(8) = 32
4(15) = 60
1518
1842
1660
Conclusion: Based on composite score, Location East #2 seems to be the best.
Chapter 08 – Location Planning and Analysis
11. Given: We are given factors and factor rating scores for three locations. Scores range from 1 – 10
(best).
Location Score
Factor
A
B
C
Business services
9
5
5
Community services
7
6
7
Real estate cost
3
8
7
Construction costs
5
6
5
Cost of living
4
7
8
Taxes
5
5
4
Transportation
6
7
8
a. Assume that the manager weights each factor equally.
Because there are seven factors, each factor will have a weight of 1/7. Therefore, we can
sum the scores and divide by 7 to determine the weighted score for each alternative.
Factor
A
B
C
Business services
9
5
5
Community services
7
6
7
Real estate cost
3
8
7
Construction costs
5
6
5
Cost of living
4
7
8
Taxes
5
5
4
Transportation
6
7
8
Total
39
44
44
Total / 7
5.57
6.29
6.29
Conclusion: Location B or C is best, followed by Location A.
Chapter 08 – Location Planning and Analysis
8-15
b. Two of the factors (business services and construction costs) are given weights that are
double the weights of the other factors.
We will give these two factors weights of 2/9 and the other five factors weights of 1/9.
Then, we will multiply each factor’s rating by that factor’s weight.
Factor
Location Score
Weight
Weight x Score
Business Services
9
5
5
2/9
18/9
10/9
10/9
Community Services
7
6
7
1/9
7/9
6/9
7/9
Real Estate Cost
3
8
7
1/9
3/9
8/9
7/9
Construction Costs
5
6
5
2/9
10/9
12/9
10/9
Cost of Living
4
7
8
1/9
4/9
7/9
8/9
Taxes
5
5
4
1/9
5/9
5/9
4/9
Transportation
6
7
8
1/9
6/9
7/9
8/9
1.0
53/9
55/9
54/9
Conclusion: Location B is best, followed by Location C, and then Location A.
12. Given: A toy manufacturer produces toys in five locations and will ship raw materials from a
new, centralized warehouse. The monthly quantities to be shipped to each location are identical.
The coordinates for all five locations are shown below.
Location
X
Y
A
3
7
B
8
2
C
4
6
D
4
1
E
6
4
Chapter 08 – Location Planning and Analysis
8-16
Education.
Sum the values in each coordinate’s column.
Location
X
Y
A
3
7
B
8
2
C
4
6
D
4
1
E
6
4
Sum
25
20
n = 5 locations.
13. Given: A clothing manufacturer produces clothes at four locations. The manufacturer must
determine the location of a central shipping point. The coordinates and weekly shipping quantities
to the four locations are shown below.
Location
X
Y
Weekly
Quantity (Q)
A
5
7
15
B
6
9
20
C
3
9
25
D
9
4
30
The correct formulas for the center of gravity are shown below:
Sum the values in the quantity column.
Location
X
Y
Weekly
Quantity (Q)
A
5
7
15
B
6
9
20
C
3
9
25
D
9
4
30
Sum
90
Chapter 08 – Location Planning and Analysis
8-17
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
(round to 1 decimal)
(round to 1 decimal)
Conclusion: The central shipping point should be located at 6.0, 7.0.
14. Given: A company handling hazardous waste wants to minimize shipping cost for shipments to a
disposal center from five stations that it operates. The coordinates for each of the five stations and
the volumes shipped to the new disposal center are shown below.
Location
X
Y
Volume in Tons
per Day (Q)
1
10
5
26
2
4
1
9
3
4
7
25
4
2
6
30
5
8
7
40
The correct formulas for the center of gravity are shown below:
Sum the values in the quantity column.
Location
X
Y
Volume
Tons per
Day (Q)
1
10
5
26
2
4
1
9
3
4
7
25
4
2
6
30
5
8
7
40
Sum
130
(round to 1 decimal)
(round to 1 decimal)
Conclusion: The disposal center should be located at 6.0, 6.0.
Chapter 08 – Location Planning and Analysis
Case: Hello Walmart?
[This is a good case for in-class discussion. Three groups can be formed: one to take the position of
residents, one to take the position of small businesses, and one to take the position of Walmart.]
1. Owners of small businesses:
Pro: Restaurants and other businesses that do not compete directly with Walmart generally would
2. Residents:
Pro: Another shopping option, lower prices, and other, non-competing businesses that would be
attracted by the increased traffic that Walmart would generate.
Con: Increased traffic and noise, construction inconveniences, loss of small-town atmosphere,
and loss of local businesses and jobs.
Walmart responses: The company would be a “good neighbor,” supporting the community
and providing jobs for low-skilled and handicapped workers. Construction would create
construction jobs and generate taxes and revenues for the community. Shoppers would benefit
from Walmart’s low prices. In addition, there would be an increase in the tax base.
Enrichment Module
A. Distance Measurement
B. Center of Gravity Method with Predetermined Sites
C. Factor Scoring Model
D. Emergency Facility Location
A. Distance Measurement
The companies measure distance when making two important decisions:
1. Facility Layout Decision:
Distances are estimated/measured in determining the best layout of equipment or departments
2. Facility Location Decision:
Distance measurement also is a very important input measure in determining the best location
for a new service or a manufacturing facility, relocation of an existing facility, or elimination
of an existing facility.
8-20
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
1. Empirical Method
2. Rectilinear Method
3. Euclidean Method
4. Weighted Average Method
1. Empirical Method:
The empirical method is the most accurate distance measure. Using the empirical method,
distance can be measured in one of two ways. The first type of empirical measurement is the
2. Rectilinear Method
This mathematical method is very easy to compute and lends itself to easy implementation of
computerized layout or location techniques. Rectilinear method requires the use of a two
dimensional space with a horizontal axis, X, and a vertical axis, Y. Rectilinear distance often