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T YPES OF FACILITIES
Heavy-manufacturing facilities
FACTORS IN HEAVY
MANUFACTURING LOCATION
Construction costs
Land costs
Raw material & finished goods shipment modes
Proximity to raw materials
Utilities
Means of waste disposal
Labor availability
LOCATION INCENTIVES
Tax credits
Relaxed government regulation
Job training
Infrastructure improvement
Money
MODELS/TECHNIQUES
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service
WEIGHT
Site 1
Site 2
Site 3
.30
.20
.15
.15
.10
.05
.05
80
100
60
75
65
85
50
65
91
95
80
90
92
65
90
75
72
80
95
65
90
WEIGHTED SCORES
Site 1
Site 2
Site 3
24.00
20.00
9.00
11.25
6.50
4.25
2.50
77.50
19.50
18.20
14.25
12.00
9.00
4.60
3.25
80.80
27.00
15.00
10.80
12.00
9.50
3.25
4.50
82.05
CENTER-OF-GRAVITY
TECHNIQUE
Locate facility at center of movement in
geographic area
Based on weight and distance traveled;
establishes grid-map of area
Identify coordinates and weights shipped for
each location
GRID-MAP COORDINATES
y
x=
i=1
1 (x1, y1), W1
yiWi
i=1
y=
y1
xiWi
i=1
2 (x2, y2), W2
y2
Wi
Wi
i=1
where,
x, y = coordinates of new facility at
3 (x3, y3), W3
center of gravity
xi, yi = coordinates of existing facility i
Wi = annual weight shipped from
facility i
y3
x1
x2
x3
CENTER-OF-GRAVIT Y TECHNIQUE
y
700
x
y
W
C
600
Miles
500
(135)
B
(105)
400
300
200
D
(60)
A
(75)
100
0
A
200
200
75
B
100
500
105
C
250
600
135
D
500
300
60
CENTER-OF-GRAVIT Y TECHNIQUE
xW
i i
x=
i=1
n
W
i
i=1
n
yW
i i
y=
i=1
n
W
i
i=1
CENTER-OF-GRAVIT Y TECHNIQUE
y
700
C
600
Miles
500
(135)
B
(105)
400
300
200
x
y
W
B
100
500
105
(75)
100
0
A
200
200
75
C
250
600
135
D
500
300
60
Formula for
x coordinate
LOAD-DISTANCE TECHNIQUE
LOAD-DISTANCE CALCULATIONS
n
LD =
ld
i
i=1
where,
LD =
load-distance value
li =
di
di
where,
(x,y) = coordinates of proposed site
(xi , yi) = coordinates of existing facility
LOAD-DISTANCE
Potential Sites
Site
X
1
360
2
420
3
250
Y
180
450
400
A
200
200
75
X
Y
Wt
Suppliers
B
C
100
250
500
600
105
135
D
500
300
60
dB =
dC = 434.2
dD = 184.4
LOAD-DISTANCE
Site 2 dA = 333
dD = 269.3
LD =
ld
i
i=1
* Choose site 3
=B7*C11+C7*C12+D7*C13+E7*C14
Weight
Shanghai
Hong Kong
Singapore
50
80
90
Economic
growth
0.18
90
80
75
Port facilities
0.15
60
95
90
Container
support
0.10
50
80
90
Land cost
0.08
90
50
30
Transportation
0.08
50
80
70
Trade Duties
0.07
70
90
90
Trade
regulations
0.05
70
95
95
Airline services
0.02
60
80
70
Area roads
0.02
60
70
80
1-85
Airport
X=14
X=20
X=30
Y=30
Y=8
Y=14
W=17000
W=12000
W=9000
1-85
Airport
X=14
X=20
X=30
Y=30
Y=8
Y=14
W=17000
W=12000
W=9000