Facility Location: Quantitative and Qualitative Methods: Topic 2

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Topic 2
Facility Location: Quantitative and
Qualitative Methods
Session 2
POM/QM For Windows. – 48 Centroid method (Gravity Center) – 71

Quantitative and Qualitative methods – 49 Synergic method or Brown & Gibson – 76
Points assignment method – 54 Review activity – 82
Factors qualification method – 55 Glosary – 85
Criteria evaluation and solutions alternatives – 58 Complementary notes – 86
Equilibrium point analysis method – 61 References – 87
Transport method – 66
/-\\ 2018-01. Didactic support material – Eng. Alexander Aragón Ch. (www.alexanderaragon.co) – Universidad Autónoma de Occidente 564201 - Facilities Design
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2 Operations Software
POM/QM For Windows (Production and Operation Management/Quantitative Methods) is an
academic software that allows to perform various useful analyzes for the course of Facilities
Design.
There are two versions, Excel QM (a complement for the spreadsheet) and QM for Windows.
The direct download link from Pearson publisher is as follow:
QM For Windows v.4.0
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2 Qualitative and quantitative location methods

The methods to be used, are directly related to the requirements (factors) that will influence
the decision1. Which ones are measurable and which are not? Which are more important?
1. Area, size or amount of space required. 5. Surroundings

2. Condition, nature and characteristics of space a. In general - physical climate, state and attitude of the
a. Form, orientation community, neighborhoods, appearance.
b. Topography and drainage b. Housing, hospitals, health and welfare.
c. Subsurface and structure of the land. c. Schools and education, recreation, cultural opportunities.
d. Predominant wind d. Urban planning, roads.
e. Improvements or preparation of the place (or building). e. Attitude of other companies.
f. Relocation of existing pipelines or service lines.
6. Investment
g. History of floods.
a. On land.
h. Ways to access the site.
b. On site improvements.
3. Relationship with sources and destinations. c. In construction, buildings, rent.
a. Raw Materials 7. Potential earnings
b. Suppliers a. Operating costs
c. Consumers or Market b. Savings and return on investment.
d. Related transportation (train, truck, river, plane)
e. Convenience in transportation.
4. Contacts
a. With the staff (labor force) - supply, availability, type,
experience
b. With public and auxiliary services - electric power, water,
gas, coal, fuel, sewage and waste disposal.
c. With local services - local transport, communications,
banks, commercial and professional services, police, fire,
garbage.
d. With the government – taxes, restrictions, codes /
regulations..
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Deciding where to locate a facility is a decision divided into three stages.
1. The selection of the region or state.

2. The selection of a community or locality in that region.
3. The selection of the final place in the community in which the facility will be built.
Therefore, the decision becomes a Multi-Stages and Multi-Decisions problem, through which
the most optimal option can be reached.
Micro Location (the Site) Macro Location (Region)
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This outline summarizes the set of decisions that a company must make in choosing a
location3:
Decision Unit Selected decision criteria
Potential Market
Planning Office Market
Shared Market
Operations Department Region Operating Costs
Operations Department Transportation Costs

Transport Logistics State Taxes
Purchases, Taxes Subregion Raw Material Costs
Industrial Relationships Costs and availability of Labor Force
Market Access / Materials

Operations Department Cost of Materials
Transport Logistics Costs and availability of Labor
Purchases Community Local Taxes
Industrial Relationships Public Services availability
Property, Plant and Equipment Sites availability
Community Services
Access to transportation networks

Operations Department Characteristics of the Site
Engineering and Design Property Taxes
Property, Plant and Equipment
Site Public Services availability
Taxes Land costs and acquisition
Construction costs
Final approval of
the site
Steering Committee
Community
Authorization of contracts and start of negotiations with
the Community and Owner
Site
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The problem becomes more complex due in each of the stages, have been considered
different criteria or "factors" such as2:
Selection of Selection of Selection of

CRITERIA
Territory Region the Site
Market 
Raw Material 
Transport  
Energy   
Work and Wages   
Laws and Taxes  
Climate and Fuels  
Community service and attitude   
Water and Waste  
The selection of appropriate sites for an installation includes many researchers, including
geographers, economists, town planners, etc. that in some cases, shows a gradual change from
quantitative models to qualitative models and eventually to diffuse models used in the
selection of the most appropriate site.
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Some research in localization models are summarized in the following tables2,4:
QUALITATIVE TECHNIQUES APPROACHES
Use subjective weights for a number of factors. The locations are "ranked" according to the high scores
Classification of Factors by Weight
and according to the weights assigned to the factors.
The factors are grouped on the basis of both subjective and objective traits. Consider also the critical
Brown and Gibson method
factors.
Kirkwood Model: Multi-Attribute
It really is an application of the MAUT approach proposed by Woodward-Clyde.
Theory of Utilities - MAUT
Brainstorming Between 4 to 7 experts in the subject that express ideas to be evaluated later.
Phillips 66 BrainStorming model but with larger groups of people, subdivided into small.
Delphi method Use between 2 and 5 successive questionnaires to a group between 15 and 25 people (experts).
QUANTITATIVE TECHNIQUES APPROACHES
Thunen's Theory of the Least Cost of The location was selected on the basis of the value of the installation in the market, and the distance
Location from the market.
It includes the cost of transportation, labor and concentration of industries. It calculates indexes of
Weber's Theory of Location
materials, labor, among others, although it excludes the costs of the land, depreciation.
The Losch Theory of Maximum Profit
The location is selected using a measure of earnings more than the cost incurred
for Localization
Transportation Problem Solution Operations Research for the allocation of plants, which includes transportation costs between them.
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2 Method of Assignment by Points

Remember that after all, it is important to have multidisciplinary teams to evaluate the
different factors in a professional manner. An example to compare 5 possible places using a
"simple" checklist5:
CHECKLIST FOR LOCALIZATION
Presents Severe Limitation 1
Presents Moderate Restriction 2
It has good condition 3
In Excellent Condition 4
CRITERIA POSSIBLE SITES

REGIONAL A B C D E
Climate (Temperature, drizzles, storms, etc.) 1 3 3 2 3
Soils (Stability, fertility, depth) 3 4 2 1 3 In what cases is a climate considered good or bad?
Suminstro and Water Quality 2 4 2 1 3
Economy (Improving, stable, decreasing) 3 3 2 2 3
Transportation (Avenues, transit) 1 3 3 1 4
Energy and its relative cost 2 3 3 2 3
Characteristics of the landscape 4 4 3 2 3
Cultural Opportunities 3 3 3 2 2
Recreational Opportunities 4 4 3 3 4
Employment opportunities 2 2 1 2 3
Medical Centers, hospitals 3 2 2 3 2 IMPORTANT: The arithmetic sum of each column
Main attractions (list and describe) 2 3 3 1 3 would give a general indication of its relative global
Exceptional characteristics (list and describe) 2 4 4 2 4
rating. However, it is necessary to bear in mind that in
COMMUNITY
Trip (Time-Distance to work, shopping, etc.) 1 2 3 3 1
some cases, a single severe qualification of a
Experience in the trip (Pleasant or Not) 3 3 3 2 3 superlative characteristic could overcome the
Community Environment 3 4 2 1 3 statistics and become the decisive factor.
Schools 3 3 2 2 3
Malls 3 4 3 2 3
Churches 3 3 3 2 2
Cultural opportunities (auditoriums, libraries) 3 3 3 2 3
Public Services (Fire, Police, etc.) 3 3 3 1 3
Protection and security 1 3 3 1 3
Medical Facilities 3 2 1 2 3
Government 3 3 3 1 2
Taxes 3 2 3 3 3 Spreadsheet
Main attractions (list and describe) 3 3 2 2 3
Exceptional characteristics (list and describe) 3 4 3 2 3 Check List
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2 Factors Rating Method

Also known as Factor Weighting, it is one of the most useful methods in decision making. The
following procedure is used for the evaluation of factors:
1. Determine the relevant factors (requirement of the intervention of experts in each case).
2. Assign a weight to each factor to indicate its relative importance compared to others.
3. Consider the alternative regions and collect the information of each of them.
4. Decide on a rating scale for the alternatives (from 1 to 100 for example).
5. Evaluate each of the location alternatives in each factor.
6. Multiply the weight of the factor by the rating of each alternative and totalize.
7. Choose the alternative that obtained the highest total score.
3
2 Rating (1 to 100) Weighted Scores
Factors Weight In Palmira In Buga Palmira Buga
Closeness to the existing store 0,10 100 60 0,1(100)=10 0,1(60)=6
Traffic volume 0,05 80 80 0,05(80)=4
5 0,05(80)=4
1 Lease costs 0,40 70 90 0,4(70)=28 0,4(90)=36
Size 0,10 86 4 92 0,1(86)=8,6 0,1(92)=9,2
Distribution 0,20 40 70 0,2(40)=8 0,2(70)=14
Operating costs 0,15 80 90 0,15(80)=12 0,15(90)=13,5
1,00 70,6 82,7 6
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1. In QM For Windows select the Location module and then, the
Weighting Method.
2. Indicate the Title, Number of Factors, Number of Locations and press
Ok.
3. Write the names of the Factors and the Alternatives; Indicate the
weights and the ratings for each alternative:
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4. Press on the button Solve.
5. Observe the Result Data window:
The best Alternative
You will find a minimized window with the results of the multiplication between the factors and
the rating:
You can use the modules in the same
way:
• Decision Analysis
• Factor Rating
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2 Criteria evaluation and solution alternatives

The Holmes prioritization matrix (Interaction Matrix)
Assign priority values to the Selection Criteria7:
Each participant is asked to evaluate the importance of each criterion with respect to the others.
Voters: CRITERIA
Normalized
Total Rows
Durability
Functions
Design
Value
Value
Size
3
𝟕
𝒙𝟏𝟎𝟎 = 𝟐𝟑, 𝟑%
Size 1 2 3 1 7 23,3% 𝟑𝟎
CRITERIA
Design 2 3 2 1 8 26,7%
Value 1 0 1 2 4 13,3%
Functions 0 1 2 1 4 13,3%
Durability 2 2 1 2 7 23,3%
Total 30 100,0%
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Alternatives Selection Matrix7
Assign each criterion a value of importance (eg. between 1 and 5 or 10) to qualify the available options
𝟒 𝟐 𝒙 𝟎, 𝟐𝟏 = 𝟎, 𝟒𝟐
𝒙 𝟏𝟎𝟎 = 𝟐𝟏%
𝟏𝟗
Standardized
Normalized
Priority
Priority
Value
Option 1 Option 2 Option 3 Option 4
Size 23,3% 4,00 0,21 1,00 0,21 2,00 0,42 3,00 0,63 4,00 0,84
Design 26,7% 5,00 0,26 4,00 1,05 3,00 0,79 2,00 0,53 1,00 0,26
CRITERIA
Value 13,3% 3,00 0,16 1,00 0,16 2,00 0,32 3,00 0,47 4,00 0,63
Functions 13,3% 3,00 0,16 4,00 0,63 3,00 0,47 2,00 0,32 1,00 0,16
Durability 23,3% 4,00 0,21 1,00 0,21 3,00 0,63 2,00 0,42 4,00 0,84
2,74 100% 19 1,00 2,26 2,63 2,37 2,74
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Activity in class:
Assign priority values to the Selection Criteria:
Qualify the criteria that students consider the most important when it comes to selecting a new cell phone.
The use of spreadsheets facilitates the construction of this tool6. Spreadsheet

Alternative Selection Matrix
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2 Breakeven Analysis Method

Quantitative Method that corresponds to a Cost-Volume Analysis to make an economic
comparison of the location alternatives8.
This analysis can be done both numerically and graphically. The graphical alternative is more
understandable given that it shows the ranges in which the alternatives are better or no
compared with others6.
The method consists of:

1. Determine the Fixed and Variable Costs of each location alternative.
2. Graph the Total Cost lines of all the alternatives in the same graph.
3. Determine which is the location of the lowest total cost for the expected production level. In the same way, you will
have the greatest benefit.
This method assumes that:

1. Fixed costs are constant in the probable production range.
2. Variable costs are linear for the range of probable production.
3. The required level of production can be estimated with approximation.
4. It is only considered a product.
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Remember that the Total Cost is given by: Donde:
Read
𝑻𝒐𝒕𝒂𝒍 𝑪𝒐𝒔𝒕 = 𝑭𝑪 + 𝒗 × 𝑸 FC = Fixed Costs
v = Variable cost per Unit
Example: Q = Quantity or Volume of Production
A manufacturer of Bicycles from Bogotá, wants to install a new plant in Valle del Cauca to serve the entire
south of western Colombia, manufacturing 2,000 bicycles per year. The cost studies indicate the following:
Fixed Costs Variable Cost/Unit

In Cali $90,000,000 $225,000
In Buga $180,000,000 $135,000
In Tuluá $330,000,000 $75,000
Analysis of the Graph:
In what range of production is minor

costing for each location (city)?
Where is the location more economical?
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1. In QM For Windows select the Breakeven / Cost-Volume Analysis and
then Cost-Volume Analysis.
2. Indicate the Title, the Number of Costs in 2, and the Number of
Options and press Ok.
3. Write the names of the Options; Indicate the Fixed Costs, the Variable Costs and the Volume
for the analysis (Volume Analysis):
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4. Push on the Solve button.
5. Look at the Result Data window:
The best alternative for 2000 units.
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You will find a minimized window with the analysis graph.
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2 Transportation Method
It is a special quantitative model of Linear Programming applied to problems that involve the
movement of products from various sources to various destinations.
It has 2 common objectives:
1. Minimize the cost when shipping n units to m destinations.

2. Maximize profits by dispatching n units to m destinations.
Recommended! An easy and fast way to draw on geographical maps, very useful to
represent in logistics or operations management the location of
production centers, distribution, port terminals, airports, road
infrastructure, etc.
You can generate PNG images of 450 x 450 pixels or capture the screen to
incorporate into your reports. Does not require installation.
https://www.scribblemaps.com
1. Cali (Google Maps)
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Example3: BARRANQUILLA
A pharmaceutical company has 4 factories that offer
four distribution centers of its main customers. The
Industrial Engineer in chief wants to determine the
minimum monthly cost of dispatches possible for his
customers. The capacity of its factories, the demand of
the distribution centers and the dispatch costs for Montería
each case, are shown in the following table:
Cúcuta
UNIT DISPATCH COSTS (Thousands)
To To To To
From
Pereira Popayán Cúcuta Montería
Barranquilla 25 35 36 60
Medellín 55 30 25 25 MEDELLÍN
Cali 40 50 80 90
Bogotá 30 40 66 75
Distribution
Capacity Demand BOGOTÁ
Factory Center Pereira
(Ton) (Ton)
(Customers)
Barranquilla 15 Pereira 10
Medellín 6 Popayán 12
Cali 14 Cúcuta 15
Bogotá 11 Montería 9
CALI
Popayán
Read
Designed in : www.scribblemaps.com
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1. In QM For Windows select the Transport module.
2. Indicate the Title, Number of Origins and Number of Destinations and
press Ok.
3. Write the names of the Origins in the rows and the Destinations in the columns, complete
the respective cost information, the respective Capacity (Supply) and Demand:
Options:
Minimize
Any Method
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4. Push on the Solve button.
5. Look at the Result Transport window (Transportation Results):
Minimum Total Cost
Dispatch Plan
Activity 1: Represent the problem as a Mathematical Model of Linear Programming.
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Mathematical model:
f = Sources from 1 a n
d = Destinations from 1 a m
C fndm = Cost to dispatch from Source n to Destination m
Q fndm = Quantity to be dispatched from Source n to Destination m
P fn = Maximum production (capacity) of the Source n
D dm = Demand of Destination m
Objective function : Minimize the total cost of dispatching Q quantities from the sources f to the destinations
d, according to the respective Costs C.
𝒇=𝒏 𝒅=𝒎
𝑴𝒊𝒏 ෍ ෍ 𝑸𝒇𝒏 𝒅𝒎 𝑪𝒇𝒏 𝒅𝒎

Decision variables: 𝒇=𝟏 𝒅=𝟏
Qfndm = Quantity to be sent from Source n to Destination m
Constraints:
P fn = Maximum production (capacity) of the Source n
D dm = Demand of Destination m
Activity 2: Solve it in Excel Solver and in QM / POM for Windows module Linear Programming.
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2 Centroid Method (Center of Gravity)

The Center of Gravity or Centroid method allows determining the location of an installation that
minimizes the costs of dispatches or the travel time to several destinations6.
In our case, it is useful to decide the location of Distribution Centers to minimize distribution costs.
This method considers distribution costs as a linear function of distance and quantity sent. It is
assumed that the amounts are constant. The use of scale maps is required to accurately locate the
different sites.
The Centroid Coordinates are determinated by:
If the same amount is send to all destinations: If you dispatch different units to all destinations:
Where: Where:
xi = coordinate x for destination i Qi = amount to be shipped to destination i
yi = coordinate y for destination i xi = coordinate x for destination i
n = number of destinations yi = coordinate y for destination i
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Example:
Calculate the Centroid point betwen the following chain stores in Cali:
14 of Calima, Éxito la Flora, 14 Valle del Lili, Éxito San Fernando. Equal units are supposed for each.
Map: Using Scribble Maps.

Coordinates: Latitude, Longitude
Stores Latitude Longitude

1 La 14 Calima 3,48509886 - 76,49759352
2 Éxito La Flora 3,48727814 - 76,51759207
3 La 14 Valle del Lili 3,36821371 - 76,52427077
4 Éxito San Fernando 3,42559782 - 76,54568553
Designed in: www.scribblemaps.com
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1. In QM For Windows (v.4) select the Location module.
2. In the icon New, select the option Location Two-dimensional sitting
3. Enter a Title, the Number of Locations and finally, pulse Ok:
Select to show the maximum number of decimal places
4. Give the names of the locations, the cost values or the

number of trips (Weight / No. of trips) and the respective
x and y coordinates.
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5. Push on the Solv buttom.
Try the online tool Geographic Midpoint Calculator

www.geomidpoint.com
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Example:
Calculate the Centroid point betwen the following chain stores in Cali:
14 of Calima, Éxito la Flora, 14 Valle del Lili, Éxito San Fernando but assuming different
dispatch quantities.
Weekly
Stores Latitude Longitude Amount
1 La 14 Calima 3,48509886 - 76,49759352 800
2 Éxito La Flora 3,48727814 - 76,51759207 900
3 La 14 Valle del Lili 3,36821371 - 76,52427077 200
4 Éxito San Fernando 3,42559782 - 76,54568553 100
Adjust the model in QM for Windows

Designed in: www.scribblemaps.com
75
2 Synergistic or Brown & Gibson Method

It is a variation of the weighted factors method, where the quantitative factors are combined with
the qualitative factors. The method consists of four stages9:
1. Assign a relative value to each Target Factor (FOi) for each viable location option i.
2. Estimate a relative value of each Subjective Factor (FSi) for each viable option of location i.
3. Combine Objective and Subjective Factors, assign to a relative weighting to obtain a Location Preference
Measurement (LPM).
4. Select the location that obtains the maximum Location Preference Measurement.
Target Factors Location Measurement – FOi
These factors are quantified in the terms of Costs that allow determining the Annual Total Cost of each Ci
location. FOi is determined by multiplying Ci by the sum of the reciprocal (inverse) costs of each place and
then take the reciprocal of the result:
−1
1
𝐹𝑂𝑖 = 𝐶𝐹𝑖 ෍
𝐶𝐹𝑖𝑛
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Location Measurement of Subjective Factors – FSi
It is necessary to assign a measurement of view by three stages:
1. Determine a qualification Wj for each location (j = Location 1, 2, …. n), with respect to the total of that
same factor.
2. Give a score Rij for each factor according to the scores for the factor in this location but on the total
factors for it.
3. For each location, combine the qualification of the factor Wj with its hierarchical order Rij, to determine
the Measure of the Subjective Factor:
𝐹𝑆𝑖 = ෍ 𝑅𝑖𝑗 × 𝑊𝑗
Location Preference Measurement – MPL
A relative importance k and (1-k) must also be assigned to the Objective and Subjective Factors:
𝑀𝑃𝐿𝑖 = 𝑘 𝐹𝑂𝑖 + 1 − 𝑘 𝐹𝑆𝑖
Spreadsheet
Brown and Gibson method
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Example:
Three possible places to build a new facility have been identified. As the quantitative factors have been
identified with the following costs:
Raw
Location Transport Workforce Energy Taxes Total Cost −1
material
North 100 50 100 80 100 430 1
Center 90 80 80 90 80 420 𝐹𝑂𝑖 = 𝐶𝐹𝑖 ෍
South 80 100 70 100 60 410
𝐶𝐹𝑖𝑛
−1
1 1 1
𝐹𝑂𝑁𝑜𝑟𝑡ℎ = 430 ෍ + + = 0,325458325
430 420 410
−1
1 1 1
𝐹𝑂𝐶𝑒𝑛𝑡𝑒𝑟 = 420 ෍ + + = 0,333207334
430 420 410
−1
1 1 1
𝐹𝑂𝑆𝑜𝑢𝑡ℎ = 410 ෍ + + = 0,341334341
430 420 410
෍≅1
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As relevant subjective factors, those related in the following table have been chosen. To qualify them, a scale
between 0 and 1 was used, where 0 is less relevant and 1, the most important.
Criteria North Center South Total

K1: Climate 0,7 0,7 0,6 2,0
K2: Recreational institutions 0,8 0,6 0,5 1,9
K3: Additional services 0,3 0,4 0,3 1,0
K4: Cost of living 0,2 0,3 0,5 1,0
K5: Workforce availability 0,4 0,5 0,7 1,6
0,7
𝑾𝑛𝑜𝑟𝑡ℎ 𝑓𝑜𝑟 𝐾1 = 2,0 = 𝟎, 𝟑𝟓𝟎
Criteria North Center South Total W norte W centro W sur

K1: Climate 0,7 0,7 0,6 2,0 0,350 0,350 0,300
K2: Recreational institutions 0,8 0,6 0,5 1,9 0,421 0,316 0,263
K3: Additional services 0,3 0,4 0,3 1,0 0,300 0,400 0,300
K4: Cost of living 0,2 0,3 0,5 1,0 0,200 0,300 0,500
K5: Workforce availability 0,4 0,5 0,7 1,6 0,250 0,313 0,438
Total 2,4 2,5 2,6 0,7
R K1 0,292 0,280 0,231 𝑾𝑠𝑜𝑢𝑡ℎ 𝑓𝑜𝑟 𝐾5 = 1,6 = 𝟎, 𝟒𝟑𝟖
R K2 0,333 0,240 0,192
R K3 0,125 0,160 0,115
R K4 0,083 0,120 0,192
R K5 0,167 0,200 0,269
0,7
𝑹𝑛𝑜𝑟𝑡ℎ 𝑓𝑜𝑟 𝐾1 =
0,7
= 𝟎, 𝟐𝟗𝟐 𝑹𝑠𝑜𝑢𝑡ℎ 𝑓𝑜𝑟 𝐾5 = = 𝟎, 𝟐𝟔𝟗
2,6
2,4
79

As relevant subjective factors, those related in the following table have been chosen. To qualify them, a scale
between 0 and 1 was used, where 0 is less relevant and 1, the most important.
Criteria North Center South Total

K1: Climate 0,7 0,7 0,6 2,0
K2: Recreational institutions 0,8 0,6 0,5 1,9
K3: Additional services 0,3 0,4 0,3 1,0
K4: Cost of living 0,2 0,3 0,5 1,0
K5: Workforce availability 0,4 0,5 0,7 1,6
Criteria North Center South Total W norte W centro W sur

K1: Climate 0,7 0,7 0,6 2,0 0,350 0,350 0,300
K3: Additional services 0,3 0,4 0,3 1,0 0,300 0,400 0,300
K4: Cost of living 0,2 0,3 0,5 1,0 0,200 0,300 0,500
Total 2,4 2,5 2,6
R K1 0,292 0,280 0,231 0,102 0,098 0,069
R K2 0,333 0,240 0,192 0,140 0,076 0,051
R K3 0,125 0,160 0,115 0,038 0,064 0,035
R K4 0,083 0,120 0,192 0,017 0,036 0,096
R K5 0,167 0,200 0,269 0,042 0,063 0,118
0,338268 0,336289 0,368396
1,042953
෍≅1
𝑅𝑖𝑗 × 𝑊𝑗 = 0,292 × 0,350 = 𝟎, 𝟏𝟎𝟐
𝑅𝑖𝑗 × 𝑊𝑗 = 0,269 × 0,438 = 𝟎, 𝟏𝟏𝟖
80

Finally, the Location Preference Measurement – LPM was determined. It was assumed that the importance of
quantitative factors (FO) is 70% compared to qualitative factors (FS) with 30%:
𝑀𝑃𝐿𝑖 = 𝑘 𝐹𝑂𝑖 + 1 − 𝑘 𝐹𝑆𝑖
Raw
Location Transport Workforce Energy Taxes Total Cost FO i k(FO i ) (1-k)(FS i ) MPL
material
North 100 50 100 80 100 430 0,32545833 0,2278208 0,10148026 0,32930109
Center 90 80 80 90 80 420 0,33320733 0,23324513 0,10088684 0,33413198
South 80 100 70 100 60 410 0,34133434 0,23893404 0,11051872 0,34945276 *
1,0000000
Criteria North Center South Total W norte W centro W sur k 0,70
K1: Climate 0,7 0,7 0,6 2,0 0,350 0,350 0,300 1-k 0,30
K3: Additional services 0,3 0,4 0,3 1,0 0,300 0,400 0,300 LPM Max: 0,34945276
K4: Cost of living 0,2 0,3 0,5 1,0 0,200 0,300 0,500
Total 2,4 2,5 2,6
R K1 0,292 0,280 0,231 0,102 0,098 0,069
R K2 0,333 0,240 0,192 0,140 0,076 0,051
R K3 0,125 0,160 0,115 0,038 0,064 0,035
R K4 0,083 0,120 0,192 0,017 0,036 0,096
R K5 0,167 0,200 0,269 0,042 0,063 0,118
0,338268 0,336289 0,368396
1,042953
𝑀𝑃𝐿𝑁𝑜𝑟𝑡ℎ = 0,70 0,32545833 + 0,30 0,338268 = 0,32930109

𝑀𝑃𝐿𝐶𝑒𝑛𝑡𝑒𝑟 = 0,70 0,33320733 + 0,30 0,336289 = 0,33413198
𝑀𝑃𝐿𝑆𝑜𝑢𝑡ℎ = 0,70 0,34133434 + 0,30 0,368396 = 𝟎,34945276* Location to choose
81
2 Review Activity
Scan this code with your phone and follow the instructions of the teacher
You can visit manually at: www.alexanderaragon.co, link "courses" and press "Class Activity“ 
Prepare to read and answer the following questions as soon as possible!
82
2 Review Activity
One of following Localization Methods, is not quantitative:
A Rating Method or Factor Weighting.
B Transportation Method.
Click on an
answer:
C Break-even Analysis Method.
D Centroid method.
And wait for the assignment of a new code!
83
2 Review Activity
One of the following is not a Quantitative Factor:
A Transportation Costs.
B Local Taxes.
Click on an
answer:
C Labor costs.
D Availability of commercial services.
84
2 Glossary
Incorporate on this Glossary page, at least 5 terms used in this session, with their respective definitions:
85
2 Supplementary notes
Review Workshop 1
86
2 References Session 2:
1. MUTHER, Richard & HALES, Lee. Systematic Layout Planning. Management & Industrial Research Publications. Marietta. GA, USA. 2015. 416 p.
2. KAPOOR, Vikas et al. Location Selection – A Fuzzy Clustering Approach. International Journal of Fuzzy Systems, Vol. 10, No. 2, June 2008. p. 123
3. CHASE, Richard et al. Operations Management for Competitive Advantage. McGraw-Hill Higher Education, 2000 - 864 p.
4. INNOVA FORUM. Creatividad e Innovación. Técnicas. http://www.innovaforum.com/indice.htm
5. STARKE, Barry W. & SIMONDS, John O. Landscape Archtecture. A manual of environmental planning and design. Mc Graw-Hill Education. 5th Ed. 2013, 430 p.
6. STEVENSON, William J. Operations Management. McGraw-Hill Irwin. 7 ed. 2012. 945 p.
7. ABARCA, Javier; BEDAR, Al; CARLSON, Denise, et al. Introductory Engineering Design: A Projects-Based Approach. University of Colorado. 2000.
8. RENDER, Barry & HEIZER, Jay. Administración de la Producción. Pearson Educación, México. 2007. 472 p.
9. CARRO P. Roberto & GONZALEZ G. Daniel. Administración de las Operaciones. Localización de Instalaciones. Facultad Ciencias Económicas y Sociales. Universidad Nacional
del Mar del Plata. 2013. 25 p.
Material compiled by Alexander Aragón Ch. For academic use only.
Copyright Notice: This presentation may contain material protected by the copyrights cited in the sources consulted; other material may be adapted to the permitted uses under the guidelines of
Multimedia and exemptions for academic use in the Copyright laws in some countries or under Creative Commons licensing. Use for other purposes is prohibited.
Imagees : | 1 Google Maps |
Icons: Graphic Resources SL (www.flaticon.com)
This work is covered under the Creative Commons Attribution-Share Alike 3.0 Unported license. To see a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/deed.es.
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87

Facility Location: Quantitative and Qualitative Methods: Topic 2

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Facility Location: Quantitative and Qualitative Methods: Topic 2

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POM/QM For Windows. – 48 Centroid method (Gravity Center) – 71

The direct download link from Pearson publisher is as follow:

QM For Windows v.4.0

2 Qualitative and quantitative location methods

1. Area, size or amount of space required. 5. Surroundings

2 Qualitative and quantitative location methods

1. The selection of the region or state.

Micro Location (the Site) Macro Location (Region)

2 Qualitative and quantitative location methods

Operations Department Transportation Costs

Market Access / Materials

Access to transportation networks

2 Qualitative and quantitative location methods

Selection of Selection of Selection of

2 Qualitative and quantitative location methods

QUANTITATIVE TECHNIQUES APPROACHES

2 Method of Assignment by Points

CRITERIA POSSIBLE SITES

2 Factors Rating Method

2 Factors Rating Method

2 Factors Rating Method

5. Observe the Result Data window:

The best Alternative

2 Criteria evaluation and solution alternatives

2 Criteria evaluation and solution alternatives

Option 1 Option 2 Option 3 Option 4

2 Criteria evaluation and solution alternatives

The use of spreadsheets facilitates the construction of this tool6. Spreadsheet

2 Breakeven Analysis Method

The method consists of:

This method assumes that:

2 Breakeven Analysis Method

Fixed Costs Variable Cost/Unit

Analysis of the Graph:

In what range of production is minor

Where is the location more economical?

2 Breakeven Analysis Method

2 Breakeven Analysis Method

5. Look at the Result Data window:

The best alternative for 2000 units.

2 Breakeven Analysis Method

It has 2 common objectives:

1. Minimize the cost when shipping n units to m destinations.

5. Look at the Result Transport window (Transportation Results):

Minimum Total Cost

Activity 1: Represent the problem as a Mathematical Model of Linear Programming.

𝑴𝒊𝒏 ෍ ෍ 𝑸𝒇𝒏 𝒅𝒎 𝑪𝒇𝒏 𝒅𝒎

Qfndm = Quantity to be sent from Source n to Destination m

2 Centroid Method (Center of Gravity)

The Centroid Coordinates are determinated by:

2 Centroid Method (Center of Gravity)

Map: Using Scribble Maps.

Stores Latitude Longitude

Designed in: www.scribblemaps.com

2 Centroid Method (Center of Gravity)

3. Enter a Title, the Number of Locations and finally, pulse Ok:

Select to show the maximum number of decimal places

4. Give the names of the locations, the cost values or the

2 Centroid Method (Center of Gravity)

Try the online tool Geographic Midpoint Calculator

2 Centroid Method (Center of Gravity)

Adjust the model in QM for Windows