Module 08 – Facility Location

Semester II
Course Operations Management [SL OP 502]
Module 8 – Facility Location
Document Numericals
Updated on October 26, 2021

1. A company is considering setting up a new distribution center to serve its retail outlets
O1, O2 and O3, with the coordinates O1 (410, 630), O2(690, 540), and O3(520, 750).
Respective annual truck shipments to these locations are 95,000 units, 64,000 units and
122,000 units. Determine the coordinates of the distribution center using the centroid
method. Detailed calculations need to be shown.
Ans Coordinates (521.53, 661.60)

2. For setting up a new production facility, a firm has to choose between three location
alternatives – P, Q & R for which factors considered, factor ratings (weightage) and
location ratings for each factor are as below. Choose the location between locations P, Q
& R. Give reasons for your answer.

# Factor Factor Ratings Location Rating

P Q R
1 Labour availability & attitude 2 6 7 3
2 Proximity to markets 3 5 6 3
3 Community attitude 5 3 4 5
4 Transportation facilities & cost 3 8 10 6
5 Civic amenities 4 2 1 4
6 Availability of power & cost of power 2 4 6 5

Ans.

Location Total weighted score

P 82
Q 98
R 84

Since the total weighted score of Location Q is the highest, Location Q should be selected.

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