NETWORK LOCATION MODELS

MODELS/TECHNIQUES

• Location factor rating

• Center-of-gravity
• Load-distance
 LOCATION FACTOR RATING

• Identify important factors

• Weight factors (0.00 - 1.00)
• Subjectively score each factor (0 - 100)
• Sum weighted scores
 LOCATION FACTOR RATING

SCORES (0 TO 100)
LOCATION FACTOR WEIGHT Site 1 Site 2 Site 3
Labor pool and climate .30 80 65 90
Proximity to suppliers .20 100 91 75
Wage rates .15 60 95 72
Community environment .15 75 80 80
Proximity to customers .10 65 90 95
Shipping modes .05 85 92 65
Air service .05 50 65 90

Weighted Score for “Labor pool and climate” for

Site 1 = (0.30)(80) = 24
LOCATION FACTOR RATING

WEIGHTED SCORES
Site 1 Site 2 Site 3
24.00 19.50 27.00
20.00 18.20 15.00
Site 3 has the
9.00 14.25 10.80
highest factor rating
11.25 12.00 12.00
6.50 9.00 9.50
4.25 4.60 3.25
2.50 3.25 4.50
77.50 80.80 82.05
LOCATION FACTOR RATING WITH
EXCEL
LOCATION FACTOR RATING WITH OM
TOOLS
 CENTER-OF-GRAVITY
TECHNIQUE

• Locate facility at center of movement in

geographic area
• Based on weight and distance traveled;
establishes grid-map of area
• Identify coordinates and weights shipped for
each location
 GRID-MAP COORDINATES

y n n
 xiWi  yiWi
2 (x2, y2), W2 i=1 i=1
y2 x= n y= n
 Wi  Wi
1 (x1, y1), W1 i=1 i=1
y1
where,
x, y = coordinates of new facility at
3 (x3, y3), W3 center of gravity
y3 xi, yi = coordinates of existing facility i
Wi = annual weight shipped from
facility i

x1 x2 x3 x
 CENTER-OF-GRAVIT Y TECHNIQUE
y
A B C D
700
C x 200 100 250 500
600 (135) y 200 500 600 300
B
W 75 105 135 60
500 (105)
Miles

400
D
300
A (60)
200 (75)
100

0 100 200 300 400 500 600 700 x

Miles
 CENTER-OF-GRAVIT Y TECHNIQUE

n
 xW
i i
i=1 (200)(75) + (100)(105) + (250)(135) + (500)(60)
x= = = 238
n 75 + 105 + 135 + 60
 W
i
i=1

n
 yW
i i
i=1 (200)(75) + (500)(105) + (600)(135) + (300)(60)
y= = = 444
n 75 + 105 + 135 + 60
 W
i
i=1
 CENTER-OF-GRAVIT Y TECHNIQUE
y
A B C D
700
C x 200 100 250 500
600 (135) y 200 500 600 300
B
W 75 105 135 60
500 (105)
Center of gravity (238, 444)
Miles

400
D
300
A (60)
200 (75)
100

0 100 200 300 400 500 600 700 x

Miles
CENTER-OF-GRAVIT Y WITH EXCEL

Formula for
x coordinate
CENTER-OF-GRAVIT Y WITH OM TOOLS
 LOAD-DISTANCE TECHNIQUE

 Compute (Load x Distance) for each site

 Choose site with lowest (Load x Distance)
 Distance can be actual or straight-line
 LOAD-DISTANCE CALCULATIONS

where,
LD =  ld i i

LD = load-distance value i=1

li = load expressed as a weight, number of trips or units
being shipped from proposed site and location i
di = distance between proposed site and location i
di = (xi - x)2 + (yi - y)2
where,
(x,y) = coordinates of proposed site
(xi , yi) = coordinates of existing facility
 LOAD-DISTANCE

Potential Sites Suppliers

Site X Y A B C D
1 360 180 X 200 100 250 500
2 420 450 Y 200 500 600 300
3 250 400 Wt 75 105 135 60

Compute distance from each site to each supplier

Site 1 dA = (xA - x1)2 + (yA - y1)2 = (200-360)2 + (200-180)2 = 161.2

dB = (xB - x1)2 + (yB - y1)2 = (100-360)2 + (500-180)2 = 412.3

dC = 434.2 dD = 184.4
 LOAD-DISTANCE

Site 2 dA = 333 dB = 323.9 dC = 226.7 dD = 170

Site 3 dA = 206.2 dB = 180.3 dC = 200 dD = 269.3

Compute load-distance
n
LD =  ld i i
i=1
Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063
Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,789
Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*

* Choose site 3
LOAD-DISTANCE WITH EXCEL

=B7*C11+C7*C12+D7*C13+E7*C14
LOAD-DISTANCE WITH OM TOOLS
 EXAMPLE-SELECT THE LOCATION

Location factor Weight Shanghai Hong Kong Singapore

Political stability 0.25 50 80 90
Economic 0.18 90 80 75
growth
Port facilities 0.15 60 95 90
Container 0.10 50 80 90
support
Land cost 0.08 90 50 30
Transportation 0.08 50 80 70
Trade Duties 0.07 70 90 90
Trade 0.05 70 95 95
regulations
Airline services 0.02 60 80 70
Area roads 0.02 60 70 80
 EXAMPLE –DECIDE ABOUT THE
DISTRIBUTION LOCATION

Federal parcel service wants to build a new

distribution centre. The centre needs to be in the
vicinity of uncongested interstate-77, interstate -85
and international airport. The co-ordinates are given
below. Determine the best site

Interstate -77 Interstate -85 International Airport

X=14 X=20 X=30
Y=30 Y=8 Y=14
W=17000 W=12000 W=9000
EXAMPLE-IDENTIFY THE SITE FOR SUPPLY
DEPOT
 Division commanders are limited to three possible sites for
the supply depot . The co -ordinates are site 1(400,250),
site2(100,200) and site 3(200,500). Determine the best site

Supplier A Supplier B Supplier C

X=14 X=20 X=30
Y=30 Y=8 Y=14
W=17000 W=12000 W=9000