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    Chapter 2 (Facilities Location) DQP 4092

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    Ainatul Alia Allias
    The document discusses factors to consider when selecting a facility location, including proximity to markets and suppliers, transportation infrastructure, availability of resources like power and water, and characteristics of the local community. It also defines different methods for measuring distances between locations, including rectilinear, Euclidean, and flow path. Finally, it introduces three models for quantitative facility location planning: the center of gravity model, which minimizes distribution costs; the minisum model; and the minimax model.

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    Chapter 2 (Facilities Location) DQP 4092

    Uploaded by

    Ainatul Alia Allias
    20 views45 pages
    The document discusses factors to consider when selecting a facility location, including proximity to markets and suppliers, transportation infrastructure, availability of resources like power and water, and characteristics of the local community. It also defines different methods for measuring distances between locations, including rectilinear, Euclidean, and flow path. Finally, it introduces three models for quantitative facility location planning: the center of gravity model, which minimizes distribution costs; the minisum model; and the minimax model.

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    Chapter 2 (Facilities Location)DQP 4092 (1)

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    The document discusses factors to consider when selecting a facility location, including proximity to markets and suppliers, transportation infrastructure, availability of resources like power and water, and characteristics of the local community. It also defines different methods for measuring distances between locations, including rectilinear, Euclidean, and flow path. Finally, it introduces three models for quantitative facility location planning: the center of gravity model, which minimizes distribution costs; the minisum model; and the minimax model.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views45 pages

    Chapter 2 (Facilities Location) DQP 4092

    Uploaded by

    Ainatul Alia Allias
    The document discusses factors to consider when selecting a facility location, including proximity to markets and suppliers, transportation infrastructure, availability of resources like power and water, and characteristics of the local community. It also defines different methods for measuring distances between locations, including rectilinear, Euclidean, and flow path. Finally, it introduces three models for quantitative facility location planning: the center of gravity model, which minimizes distribution costs; the minisum model; and the minimax model.

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    of 45

    DQP 4092

    Facility Management
    Chapter 2
    Facilities Location
    Facilities Location
     Sub Topic:

     2.1 Requirement For Selecting a Suitable


    Location
     2.2 Factor Influencing Plant Location
     2.3 Distance measure
     2.4 Facilities Location Model
    Learning Outcome
    At the end of this chapter, students should be
    able to:

     Identify suitable location for facilities


    planning.
     Determine the factor of choosing location.
     Used the quantitative facilities planning

    models to solve various facilities planning


    problems.
    INTRODUCTION
     The facilities location problem is an important
    strategic level decision-making for an
    organization
     One of the key features of a conversion process

    (manufacturing systems) is the efficiency with


    which the product (services) is transferred to
    the customers
     The plant location should be based on the

    company’s expansion plan and policy,


    diversification plan for the products, changing
    market conditions.
     
    2.1 Requirement for Selecting a Suitable Location

     The requirement for selecting a suitable


    location arises because of two situations:

     a)When starting a new factory.


     b)In case of existing factory.
    2.2 Factor Influencing Plant Location
     1. Proximity to market:
     Every company is expected to serve its customers by providing

    goods and services at the time needed and reasonable price


    organizations may choose to locate facilities close to the
    market or away from the market depending upon the product.
    When the buyers for the product are concentrated, it is
    advisable to locate the facilities close to the market.
     Locate nearer to the market is preferred if

    ◦ The products are delicate and susceptible to spoilage


    ◦ After sales services are promptly required very often
    ◦ Transportation cost is high and increase the cost significantly
    ◦ Shelf life of the product is low
     Nearness to the market ensures a consistent supply of goods
    to customers and reduces the cost of transportation.
    INTRODUCTION (cont…)
     2. Supply of Raw Material:
     It is essential for the organization to get raw material in right
    qualities and time in order to have an uninterrupted production.
    This factor becomes all the important if the materials are
    perishable and cost of transportation is very high.
     General guidelines suggested regarding effects of raw materials

    on plant location is:


     When a single raw material is used without loss of weight, locate

    the plant at the raw material source, at the market or at any


    point in between.
     When weight loosing raw material is demanded, locate the plant

    at the raw material source.


     When raw material is universally available, locate close to the

    market area.
    INTRODUCTION (cont…)
     3. Transport Facilities:
     Speedy transport facilities ensure timely supply of
    raw materials to the company and finished goods to
    the customers. The transport facility is a prerequisite
    for the location of the plant. There are five basic
    modes of physical transportation, air, road, rail, water
    and pipeline. Goods that are mainly intended for
    exports demand a location near to the port or large
    airport. The choice of transport method and hence
    the location will depend on relative costs,
    convenience, and suitability. Thus transportation cost
    to value added is one to the criteria for plant location.
    INTRODUCTION (cont…)
     4. Infrastructure availability:
     The basic infrastructure facilities like power, water and
    waste disposal, etc., become
     The prominent factors in deciding the location. Certain types
    of industries are power hungry e.g., aluminium and steel and
    they should be located close to the power station or location
    where uninterrupted power supply is assured throughout the
    year. The non-availability of power may become a survival
    problem for such industries. Process industries like paper,
    chemical, cement, etc., require continuous supply of water in
    large amount and good quality, and mineral content of water
    becomes an important factor. Waste disposal facilities for
    process industries are an important factor, which influences
    the plant location.
    INTRODUCTION (cont…)
     5. Labour and wages:
     The problem of securing adequate number of

    labour and with skills specific is a factor to be


    considered both at territorial as well as at
    community level during plant location
    relations in a prospective community is to be
    studied. Prospective community is to be
    pattern, cost of living and industrial relation
    and bargaining power of the unions forms the
    important considerations.
    INTRODUCTION (cont…)
     6. Law and taxation:
     The policies of the stage governments and local bodies

    concerning labour laws, building codes, safety, etc., are


    the factors that demand attention. In order to have a
    balanced regional growth of industries, both central and
    state governments in our country offer the package of
    incentives to entrepreneurs in particular locations. The
    incentive package may be in the form of exemption from
    a sales tax and excise duties for a specific period, soft
    loan from financial institutions, subsidy in electricity
    charges and investment subsidy. Some of these
    incentives may tempt to locate the plant to avail these
    facilities offered.
    INTRODUCTION (cont…)
     7. Suitability of land and climate:
     The geology of the area needs to be

    considered together with climatic conditions


    (humidity, temperature). Climate greatly
    influences human efficiency and behaviour.
    Some industries require specific climatic
    conditions e.g., textile mill will require
    humidity. Now, with the development in air-
    conditioning facilities the climatic condition
    can be controlled but at a high cost.
    INTRODUCTION (cont…)
     8. Supporting industries and services:
     Nowadays the manufacturing organization will
    not make all the components and parts by itself
    and it subcontracts the work to vendors. So, the
    source of supply of component parts will be the
    one of the factors that influences the location.
    The various services like communications,
    banking services professional consultancy
    services and other civil amenities services will
    play a vital role in selection of a location.
    INTRODUCTION (cont…)
     9. Community and labour attitudes:
     Community attitude towards their work and
    towards the prospective industries can make
    or mar the industry. Community attitudes
    towards supporting trade union activities are
    important criteria. Facility location in specific
    location is not desirable even though all
    factors are favouring because of labour
    attitude towards management, which brings
    very often the strikes and lockouts.
    INTRODUCTION (cont…)
     2.3 Distance Measure

     The distance measure involved in a facility
    location problem is an important element in
    formulating an analytical model. Distance
    measures can be categorized as:
    2.3Distance Measure
     The distance measure involved in a facility
    location problem is an important element in
    formulating an analytical model. Distance
    measures can be categorized as:

     1. Rectilinear
     2. Euclidean
     3. Flow path
    2.3 Distance Measure (Cont……)
     1. Rectilinear
     Distance are measured along paths that are

    orthogonal (or perpendicular) to each other.


     Figure 2.1 shows the distance from point A to

    point B using rectilinear distance.


     Example :
     Material transporter moving along rectilinear

    aisles in a factory
     Formula: dAB = │ xA – xB │+ │ yA – yB │
    2.3Distance Measure
    (Cont……)
    2.3 Distance Measure (Cont.…)
     Example 2

     Please calculate the distance from KKTM


    Kuantan Pahang A(40,80) to Pekan B (70,90)
    using rectilinear distance measure.
    2.3 Distance Measure (Cont.…)
     Solution
     KKTM Kuantan=point A(40,80)
     Pekan=point B (70,90)
     dAB = │ xA – xB │+ │ yA – yB │

     So
     dAB = │ 40 – 70 │+ │ 80 – 90 │
     dAB = 30+10
     dAB = 40KM
    2.3 Distance Measure (Cont.…)

     2. Euclidean
     Straight line
     Distance are measured along the straight line path

    between two points.


     Figure 2.2 shows the distance from point A to point

    B using Euclidean distance.


     Example:
     A straight conveyor segment linking two work

    station illustrate Euclidean distance.

     Formula: dAB =  ( xA – xB )2 + ( yA – yB )2
    2.3 Distance Measure (Cont.…)
    2.3 Distance Measure (Cont.…)
     Example 2

     Please calculate the distance from Simpang


    Pulai A (140,80) to Lumut B (100,90) using
    Euclidean distance measure.
    2.3 Distance Measure (Cont.…)
     Solution

     Simpang Pulai = Point A (140,80)


     Lumut B = Point B (100,90)

     dAB =  ( xA – xB )2 + ( yA – yB )2
     dAB =  (140– 100)2 + ( 80 – 90 )2
     dAB =  402 + 102
     dAB =  402 + 102
     dAB =  1700
     dAB =41 KM
    2.3 Distance Measure (Cont.…)
     3. Flow path
     Distance is measured along the actual path

    traversed between two points.


     Example:
     Automated guided vehicles system a vehicle

    on a transport mission must follow the guide


    path network.
    2.4 Facilities Location Model
     Only three facility location model will be
    discussed in detail. Consisting three (3)
    location model :

     2.4.1 Centure of gravity


     2.4.2 Minisum location model
     2.4.3 Minimax location model.
    2.4.1 Centure of Gravity
     Centure of gravity

     Finds location of distribution center that minimizes distribution


    costs
     Things to be considered are:

     a. Location of markets
     b. Volume of goods shipped to those markets
     c. Shipping cost (or distance)
      

     Place existing locations on a coordinate grid

    ◦ Grid origin and scale is arbitrary


    ◦ Maintain relative distances
     Calculate X and Y coordinates for ‘center of gravity’
    ◦ Assumes cost is directly proportional to distance and volume shipped
    2.4.1 Centure of Gravity
    (cont…)
     x - coordinate = i∑dixQi
     i∑Qi
      
      

     y - coordinate = i∑d Q
    iy i
     i∑Qi
      
     where dix = x-coordinate of location i
     diy = y-coordinate of location i
     Qi = Quantity of goods moved to or from location
    i
    2.4.1 Centure of Gravity
    (cont…)
    2.4.1 Centure of Gravity
    (cont…)
    2.4.1 Centure of Gravity (cont…)
    2.4.2 Minisum Location Model
     The objective of minisum location model is to
    minimize the sum of the weight distances
    between the new facility and the other existing
    facilities.The minisum location problem is
    formulated as below:
    2.4.2 Minisum Location Model
    (Cont…)
     Where f(x) = total cost of travel between
    new facility and existing facility
     wi = the weighted score
     x = x-coordinate for new facility
     y = y-coordinate for new facility
     ai = x-coordinate for existing facility
     bi = y-coordinate for existing facility
    2.4.2 Minisum Location Model (Cont…)
     Examples 1
     In order to illustrate how one determines the optimum
    solution to the minisum problem, consider an example
    involving the minisum location of a new machine tool in
    a maintenance department. Suppose there are five
    existing machines that have a material handling relation­
    ship with the new machine.
     The existing machines are located at the points P1 = (1,
    1), P2 = (5, 2), P3 = (2, 8), P4 = (4, 4), and P5 = (8, 6) as
    in Figure 2.5. The cost per unit distance traveled is the
    same between the new machine and each existing
    machine. The number of trips per day between the new
    machine and the existing machines are 5, 6, 2, 4, and
    8, respectively.
    2.4.2 Minisum Location Model
    (Cont…)
    2.4.2 Minisum Location Model (Cont…)
     Solution:
     Arrange x value ascending with the

    corresponding weight
    2.4.2 Minisum Location Model
    (Cont…)
     Sum all the weight and calculate median of
    the cumulative weight
    2.4.2 Minisum Location Model (Cont…)
     X optimum is define if partial sum first equal
    or exceeds one-half the total
     Repeat steps to get the optimum value of Y.
    2.4.2 Minisum Location Model
    (Cont…)
     The total weighted distance resulting from the location x =
    (5, 4) is:
     Minimum f(x) = max [(│x - ai │ + │y – bi │, I = 1,2,…m]
      

      
     Formula 2.6: Total weight distance
      
     f(5,4) = 5(I5 - 11 + I4 – 1I) + 6(I5 – 5I + I4 – 2I) + 2(I5 – 2I +
    I4 – 8I) +
     4(I5 – 4I + I4 – 4I) + 8(I5 – 8I + I4 – 6I)
     = 35 + 12 + 14 + 4 + 40
     = 105
    2.4.3 Minimax Location Model
     The objective of minimax location model is to minimize the maximum distance between
    the new facility and any existing facility. The minimax location problem is formulated as
    below:

     The conditions for achieving the minimax solution are:


     c1 = min (ai + bi)
     c2 = max (ai + bi)
     c3 = min (-ai + bi)
     c4 = max (-ai + bi)
      
     The optimum location will occur on the line of two location point.

     (x1*,y1*) = 0.5 (c1 – c3, c1 + c3 + c5)
     (x2*,y2*) = 0.5 (c2 – c4, c2 + c4 – c5)
     Where c5 = max (c2 – c1, c4 – c3)

     The maximum distance between the new facility and the existing facilities = c/2
    2.4.3 Minimax Location Model
    (Cont…)
     Example 2.4:
    Eight machines are to be maintained by crew
    from the central maintenance facility. The
    coordinate locations of the machines are (0,0),
    (4,6),(8,2), (10,4) (4,8), (2,4), (6,4), and (8,8) as
    in Figure below.
    2.4.3 Minimax Location Model
    (Cont…)
    2.4.3 Minimax Location Model
    (Cont…)
     Solution:
     c1 = min (ai + bi) = 0
     c2 = max (ai + bi) = 16
     c3 = min (-ai + bi) = -6
     c4 = max (-ai + bi) = 4
     c5 = max (c2 – c1, c4 – c3) = 16

     (x1*,y1*) = 0.5 (c1 – c3, c1 + c3 + c5)


     = 0.5 (6,10)
     = (3,5)
      
     (x2*,y2*) = 0.5 (c2 – c4, c2 + c4 – c5)
     = 0.5 (12,4)
     = (6,2)
    Summary
     In this chapter we already discuss:
    1. The factor influencing of selecting suitable
    location where the selection can be based on the
    proximity to market, supply of raw material,
    transport facilities and many more.
    2. There are three model to calculate the facilitis
    location which are centre of gravity, minimax and
    minisum model. Those three methods are
    appicable to determine the best location for new
    location or relocation of existing location

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