TOM 453 chapter 10 notes

TOM 453 chapter 10 notes - Chapter 10 Chapter Service...

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Unformatted text preview: Chapter 10 Chapter Service Facility Location Chapter 10 Homework Problems 10.1 a 10.3 a 10.5 a; also determine CG a 10.11 a a (These are practice problems, not to be (These turned in) turned Location Considerations a How is the location decision different for How manufacturing vs. service environments? manufacturing a For example, how would the criteria be For different for these two decisions? different • Location of an automobile assembly plant • Location of a grocery store Types of Service Facilities Facilities with direct (face-to-face) contact Facilities with customers e.g., restaurant, retail store with a Facilities with either indirect contact or no Facilities contact with customers e.g., call center, distribution center distribution a How is the location consideration different How for the two types? for a Strategic Location Considerations Competitive clustering (among competitors) a Saturation marketing (same firm) a Substitution of communication for travel a Separation of front from back office a • Front and back office need not be co-located Front e.g., dry cleaning, film processing e.g., a Impact of the internet on service location • E-distance (locating and navigating a web site) Location Factors Location of customers, demographics a Location of competitors a Location of suppliers a Costs a Business climate a Infrastructure a Labor issues a Location Factors Community considerations a Climate a Environmental issues a Regulations a Potential for expansion a Population trends a Site Selection Factors a a a a a a a a Access Visibility Traffic Parking Expansion Competition Government Labor Regression Analysis in Location Decisions a Model to predict profit for different locations Model based on significant factors based • La Quinta Inns example • What factors would be important in the decision to What locate a hotel? locate La Quinta Inns Example a Factors include Factors • competitive factors (e.g., hotels in vicinity, room competitive rates) rates) • demand generators (e.g., employment, office space, demand tourists) tourists) • area demographics (e.g., income, population) a Use the model to predict the likelihood of success Use for a new inn at a proposed location for Geographic Information Systems (GIS) Example is ArcView a Can be used to translate data, such as Can demographic information, into a map demographic a Can help in determining site location a Modeling Considerations a Geographic representation • • Network Plane – Metropolitan metric – Euclidian metric a Number of facilities • Single • Multiple a Optimization criteria • Private sector • Public sector Facility Location Techniques a a Factor rating Single facility • • • • a Cross median (metropolitan metric) Center of gravity Euclidian metric Gravity model (retail) Multiple facilities • Location set covering • Maximal covering Factor Rating Procedure a a a Approach to evaluating location alternatives Can include qualitative and quantitative inputs Procedure • Determine relevant factors • Assign a weight to each factor indicating its relative Assign importance importance • Score each location for each factor, using a common Score scale scale • Calculate a weighted score for each location • Choose location with best (typically highest) weighted Choose score score Factor Rating Example Photo-processing company wants to open a Photo-processing new store. Information on two potential locations is given. Which location would you recommend? (Higher scores are better). you Factor Rating Example Scores Factor Weight Location 1 Location 2 Traffic volume 0.4 70 80 Rental costs 0.2 90 60 Size 0.3 50 70 Accessibility 0.1 90 80 Factor Rating a a Factor rating is a general technique, with Factor applications beyond facility location applications E.g., how would you use factor rating to choose E.g., among different universities for an MBA? among Cross-Median Technique a a a a To minimize weighted travel distances between To facility and demand locations facility Weights reflect demands Travel distances are based on metropolitan Travel metric (rectangle) metric Distance between two points Distance • • = sum of two edges of a rectangle = ||difference between x coordinates| difference + |difference between y coordinates| Cross-Median Procedure 1. Calculate median n wi ∑2 i =1 2. 3. Plot locations on a map For x coordinate(s) a a a Sum weights from left to right (west to east) till median is Sum reached or exceeded reached Sum weights from right to left (east to west) till median is Sum reached or exceeded reached Draw vertical line(s) for x coordinate(s) Cross-Median Procedure (contd.) 4. For y coordinate(s) a Sum weights from bottom to top (south to north) till Sum median is reached or exceeded median a Sum weights from top to bottom (north to south) till Sum median is reached or exceeded median a Draw horizontal line(s) for y coordinate(s) 5. Location solution can be a point, a line, or an area Cross-Median Examples a Problem 10.2 page 248 • Agency wants to open an office. There are 5 Agency potential customers. Customer locations and demand are given. Recommend a location for the agency that will minimize total weighted travel distance. Use metropolitan metric. travel Cross-Median Examples (contd.) a Problem 10.4 page 248 • Pizza delivery service wants to open a branch Pizza near student housing. Location of apartment complexes and demand are given. Using metropolitan metric, recommend a location for the pizza branch that will minimize total distance traveled. distance Center of Gravity • X coordinate n ∑wx ii xcg = i =1 n ∑w i i =1 • Y coordinate n ∑wy ii ycg = i =1 n ∑w i =1 i Center of Gravity Examples a Compute center of gravity for Problem Compute 10.2 10.2 a Compute center of gravity for Problem Compute 10.4 10.4 Euclidian Metric a a Distance “as the crow flies” Along the hypotenuse of a triangle Euclidian Metric: Solution Technique Based on iterative procedure a Start with an initial trial solution (either Start center of gravity or cross-median solution are good starting points) are a Update using formulas a Stop when difference between successive Stop values of the coordinates is negligible (we will only do one iteration to illustrate) will a Solution Technique (contd.) a To calculate coordinates at any iteration • Similar to center of gravity, except weights are Similar weights/distance weights/distance • Distance is euclidian distance between a point and the Distance current solution (based on hypotenuse of a right triangle) triangle) 1/2 dis = [(xi – xs)2 + (yi – ys)2] 1/2 Euclidian Metric Example a a Using the data in Problem 10.2 and the CG Using as an initial solution, do one iteration of the solution procedure solution Need procedure for Excel assignment Need Gravity Model Based on estimation of demand and market Based share share a Compute expected annual profit of each Compute potential site for various possible store sizes (attractiveness of facility based on size and travel time) travel a Choose the site that maximizes profit a Skip details on page 241 a Multiple Facilities Location Location set covering Location a Maximal covering a Location Set Covering Problem a Find the minimum number and location of Find facilities to serve all demand points within a specified maximal service distance specified a Maximal service distance • Distance traveled by most distant customer to Distance reach a facility reach Location set covering approach For each community, identify the other sites For that can be reached from it within the travel limit limit a For each community, identify the set of For sites that could serve (cover) the community sites a • Identify subsets • Identify sites common to two or more subsets Location set covering examples a Problem 10.12 page 250 a Problem 10.13a page 250 Maximal Covering Location Problem a a a a Variation of location set covering Maximize the population covered within a desired Maximize service distance service Need information on population of each Need community community Greedy algorithm • Add a location that covers the greatest amount of Add remaining uncovered population remaining • Repeat till everyone covered or limit on number of sites Repeat reached reached ...
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This note was uploaded on 10/19/2011 for the course TOM 453 taught by Professor Kumar during the Spring '11 term at Cal Poly Pomona.

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