ANALYZING RETAILING AND

OTHER SERVICE LOCATIONS

Retailing and other service organizations typically

perform empirically based studies of alternative facility
locations. Facilities such as retailing, customer services
for profit, and health and emergency services are types
of facilities that attempt to locate near their
customers/constituents. The table below shows the steps
in these studies:
Steps in Analyzing Service
Facilities Location Decisions:
1. Customer behavior research :
Why do customer buy our products and services?

2. Market research :
Who are our customers, and what are their characterstics?

3. Data gathering for each location alternative :

Where are concentration of target customers?
4. Revenue projections for each location alternative
:
What are the relevant economic projections, discretionary
spending projections, competition activity, and time-
phased location revenue?

5. Profit projections for each location alternative :

What are the projected revenues less time-phased
operating costs?
When a company is deciding where to locate
multiple facilities, more sophisticated analytical
techniques are often used. These include :
 Linear programming

 Computer simulation

 Network Analysis and others.

Integrating Quantitative and Qualitative Factors
into Location Decisions:

In many cases qualitative factors can be

dominant when compared to quantitative ones.
Some of these qualitative factors are :
 Housing

 Cost of living

 Availability of labour
Integrating Quantitative and Qualitative Factors
into Location Decisions:

 Climate
 Community activities

 Education and Health Services

 Local Transportation Systems

 Union activities

 Proximity of similar industrial facilities

Integrating Quantitative and Qualitative Factors
into Location Decisions:

These factors all work together with Quantitative

Factors such as annual operations costs to
determine the acceptability of a particular location,
transportation cost, labour cost and availability,
material cost and availability and utilities cost.