Write short notes on Models for facility location.
Answers
Various models are available which help to identify the ideal location. Some of the popular models are:
Factor rating method
Weighted factor rating method
Load-distance method
Centre of gravity method
Break even analysis
Factor Rating Method for Location Planning
Factor Rating Method
The process of selecting a new facility location involves a series of following steps:
Identify the important location factors.
Rate each factor according to its relative importance, i.e., higher the ratings is indicative of prominent factor.
Assign each location according to the merits of the location for each factor.
Calculate the rating for each location by multiplying factor assigned to each location with basic factors considered.
Find the sum of product calculated for each factor and select best location having highest total score.
ILLUSTRATION 1:
Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, factor rating and scores for two potential sites are shown in the following table. Which is the best location based on factor rating method?
ILLUSTRATION 1
Solution:
ILLUSTRATION
The total score for location 2 is higher than that of location 1. Hence location 2, is the best choice.
Weighted Factor Rating Method
In this method to merge quantitative and qualitative factors, factors are assigned weights based on relative importance and weightage score for each site using a preference matrix is calculated. The site with the highest weighted score is selected as the best choice.
ILLUSTRATION 2:
Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, weights, and scores (1 = poor, 5 = excellent) for two potential sites are shown in the following table. What is the weighted score for these sites? Which is the best location?
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