Ardalan Heuristic for Location Planning of Service Facilities The Ardalan heuristic is used in making decisions regarding the location of service facilites, such as post offices, banks, medical clnicshospitals, et, so that a large Population can benefit from these facilities (Ardalan 1984, 1988). From the business Point of view, the heuristic helps in deciding the location of facilites, suchas fuel service stations (petrol pumps), departmental stores, etc., so that these are accessible to people fom anumber of nearby locations, thus resulting in high profits, Letus take up an example to understand this heuristic State Bank of India is planning ‘o open its rural branches in four villages/towns, which are located close to each other. (SB! already has its branches at thse locations, This examples frillustation only) t has the policy of having rural branches (which are not very profitable tothe bank from ‘he investment point of view) to serve its social objectives. SBI decides that it would first open only one branch in any one ofthese four places. Depending upon the performance of this branch, it may open a second, third, and fourth branchin the remaining places over period oftime,Itwantso determine the sequence in which the branches should be opened in the four places, namely, Bachchrawan, Maharajganj, Pbreniau, and Racbareli, The distance between each ofthese places their Populations and weights attached (according tothe bank's social criteria) are given in Table 4.13. Table 4.13 Distance 10 Population Location ~Fackekenan ~Waaajgany ~ Peron Rocko (in thousand) Vets Bechchrawan 0 8 12 10 10 07 Maharajganj 8 0 1s 6 I 12 Pehremau n IS 0 Hi 5 Ld Raebareli 10 6 It 0 8 09 ‘The Ardalan heuristic can be applied as follows. Step] Take the producto the distance, populations and weighs othe comesponding Places in every cell ofthe able and place the product values inthe respective calls ofthe table (see Table 4.14), The total cost here is equivalent othe sum ofall he weighted Population distances in column (fora place), Makarajgnn, with the lowest ctl oss the best location for the first branch of SBI162 Production and Operations Mamagement Table 4.14 Weighted population distances ighed population distances to Location Backehraw ‘Makarajganj Pekrenau Raebareli Bachohrawan 0 56 4 0 Maharaiganj 105.6 0 198 9.2 Pehrernau 66 82.5 0 60.5 Raebareli 82 m2 0 Step 2 Colurnnvise,; compare the cell values of all other locations with thet of Maharajganj the cell value is ess than or equal to that of Maharajgan, Kep tas itis, Otherwise, replaoe it with the ell value of Maharajgan (Table 4.5). Table 4.15. Modification of Teble 4.14 folowing step 2 : Weighted population distances to Location Backchrawan Makarajganj Pehremau Raebareli_ Bachehrawan 0 56 56 56 Mabarajgan) 6 0 0 0 Pehremau 66 2.5 0 605 Rachareli 32 432 Boe. 109.2 iy 98) 6S This procedure has been followed because a person at Bachhrawan would not liketo 20 oa branch at Pehremau or ai Raebareli, because ofthe higher cost involved. Therefore, ‘he cost value ofthe cll of Maharajzanj replaces the values for Polremau and Racbarel The total cost of Pehremau is now the lowest. Therefore, the second branch of SBI should be opened at Pehremau. The column for Maherajganj can be deleted now as Maharajganj was selected already for the location of the frst branch, and its costs have been already adjusted. ‘Step 3 Repeat step 2 for the reduced table (Table 4. 16), Table 4.16 Modification of Table 4.15 following step 2 Weighted population distances to Location Backehrawan Pehremau Raeburelf Bachehawan 0 6 36 Maharajganj 0 0 0 Pehremau 0 0 o Raebareli 432 43.2 9 a2 902 3G Now, Bachchrawan is selected for the third branch because ofits lowest cost, The last remaining place Raebareli can have the last (fourth) branch of SBI.