Facility Location Example

Question: A manufacturing company, whose products include soft drinks requires to set-up a manufacturing unit in
India. You have been appointed as the production manager and have the responsibility of setting up the manufacturing
facility in India.
Explain the different issues to be considered in setting a manufacturing facility, further, based on the data given below,
make a decision and state your inference.
SI. Details Weightag Mumbai Bengaluru Mysuru
No. e
1 Water and Electricity 30 25 35 20
2 Fuel 15 30 25 15
3 Market Proximity 40 40 50 30
4 Climate 15 30 50 40

Solution:
Factor Weightage Score (Out of 100) Weighted Score
(100 Points Each) Mumbai Bengaluru Mysuru Mumbai Bengaluru Mysuru
Water and Electricity 30 25 35 20 750 1,050 600
(25×30) (35×30) (20×30)
Fuel 15 30 25 15 450 375 225
(30×15) (25×15) (15×15)
Market Proximity 40 40 50 30 1,600 2,000 1,200
(40×40) (50×40) (30×40)
Climate 15 30 50 40 450 750 600
(30×15) (50×15) (40×15)
Total 100 3,250 4,175 2,625

On the basis of Maximum composite/weighted score, the Bengaluru location can be selected because only it has the
maximum score.