Chapter 10: Service Facility Location
Service Facility Location
This chapter begins using La Quinta Motor Inns to illustrate the strategic considerations in the facility location
Several strategies are explored including the impact of the Internet on service location.
Returning to La
Quinta we consider an application of regression analysis to motel site selection that is often used in business
A discussion of geographical information systems follows.
Because techniques for facility
location analysis tend to be very complex, only a few simple approaches are discussed in length. The "cross
median" approach to the location of a single facility using a metropolitan travel metric is intuitively pleasing
because it is based on the statistical property of the median.
This approach is easily implemented graphically and
often produces counterintuitive results. Furthermore, the optimality of the solution, whether it is a point, a line, or
an area, is easily verified. The Huff retail-location model has been used extensively for locating shopping centers,
retail banks, convenience stores, and other profit-making endeavors.
The location set covering model is a popular
approach to the public sector multiple facility location problem.
Southwest Airlines-1993 (A)
Southwest Airlines, the only major U.S. airline to be profitable in 1992, makes a decision as to which of two new
cities to open, or to add a new long-haul route.
This case provides a window into Southwest’s strategy,
operations, marketing, and culture.
Lessons can be learned how an airline can simultaneously be a low-cost
leader, service leader, and profit leader.
Excel spreadsheet of Huff model application to Athol Furniture case on CD-ROM
Strategic Location Considerations
Substitution of Communications for Transportation
Separation of Front from Back Office (Table. 10.1)
Impact of the Internet on Service Location
Site Considerations (Table 10.2)
Regression Analysis in Location Decisions (Table 10.3)
Geographic Information Systems (Figure 10.1)