02 PF#02 Basic Location Problem

Teknik Industri
Facilities Location
Lecture Notes #2
Stefanus Eko Wiratno 2012
TI091314 /Perancangan Fasilitas/2012/#2
Teknik Industri
Location Problems and Models

A classification scheme for location models can used to
help identify those problems
Location problems and models may be classified in a
number of ways (Daskin, 1995) :
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Demands and candidate facility locations

Type of network location models
Number of Facilities to Locate
Distance Metrics
Nature of inputs about time
Nature of inputs about uncertainty
Homogenous product and demand
Sector problems
Objective
Elasticity demand
Capacity of facilities
The allocation of demand to facilities
Level of facilities
Locating desirable facilities
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Taxonomy of Location Problems and Models

Demands and candidate facility locations
Planar location models; demands occur anywhere
on a plane
Network location models; demands and travel
between demand sites and facilities are assumed to
occur only on a network or graph composed of nodes
and links
Discrete location models; allow for the use of
arbitrary distance between nodes. As such, the
structure of the underlying network is lost
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Type of network location models
Tree problems; a network in which there is at

most one path from any node to any other node
General graph problem; consists of a connected

general network and a complete graph
Number of Facilities to Locate
Single facility location problem
Multiple facilities location problem
(exogenous: number of facilities is parameter,

endogenous: number of facilities is decision variable)
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Distance Metrics
Manhattan or rightangle distance metric
d xi , y i ; x j , y j xi x j y i y j
Euclidean or straightline distance metric
Ip
distance metric
d xi , yi ; x j , y j
x x y y
2
d xi , yi ; x j , y j xi x j
y y
p
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Taxonomy of Daskin (1995)
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Taxonomy of Brandeau and Chiu (1989)
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Taxonomy of Brandeau and Chiu (1989)
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Taxonomy of Nagy and Salhi (2007)

1. Hierarchical structure,
2. Type of input data (deterministic/stochastic),
3. Planning period (single/multi-period),
4. Solution method (exact/heuristic),
5. Objective function,
6. Solution space,
7. Number ofdepots (single/multiple),
8. Number and types of vehicles (homogeneous/
heterogeneous),
9. Route structure.
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Taxonomy of ReVelle et al. (2008)

1. Analytic models are based on large simplifying assumptions (fixed
cost of locating a facility dependent of where it will locate, demand
uniformly distributed, etc).
2. Continuous models assume that facilities can be located
anywhere in service area, while demands are often taken as being
at discrete locations
3. Network models assume that topological structure of the location
model is a network composed of lines and nodes. Much of the
literature in this area is concerned with finding special structures
that can be exploited to derive low-order polynomial time algorithms
4. Discrete models assume that the set of demands and candidate
location for facilities are discrete. These problems often formulate in
integer or mix-integer programming that most of them are NP-hard
on general network
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Classification of Location Problem

[Logistics Management]
1. Location Problems
2. Allocation Problems
3. Location Allocation Problems
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Location Problems
Determine the location of one or more new
facilities in one or more of several potential
sites
The number of sites must at least equal the
number of new facilities being located
The cost of locating each new facility at the
potential sites (fixed cost and operating &
transportation cost) is assumed to be know.
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Location Problems
Location problems can be classified as:
Single-facility problems
Multifacility problems
Classification of location problems is based on
whether the set of possible locations for a facility
is finite or infinite :
Discrete space location problem
Continuous space location problem
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Allocation Problems
Assume that the number and location of facilities
are known a priori and attempt to determine how
each customer is to be served (problem
determines how much each facility is to supply to
each customer center)
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Location-Allocation Problems
Problems determine not only how much each
customer is to receive from each facility but also
the number of facility along with their locations
and capacities
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Facility Location Problems

Can be classified as (Hax and Candea, 1984) :
Single-facility location problem; deal with the

optimal determination of the location of a
single facility Location Problem
Multi-facility location problem; deal with the

simultaneous location determintaion for more
than one facility Location-Allocation
Problem
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Another classification it is based on whether the set
of possible locations for a facility is finite or infinite :
1. Discrete space location problem
It have a finite feasible set of sites in which to
locate a facility
For most real-world problem, this models are
more appropriate
The solutions may be near optimal but
feasible
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2. Continuous space location problem;
A facility can be located anywhere within the
confines of a geographic area, then the
number of possible locations is infinite
Assuming that the transportation costs are
proportional to distance
The solutios may be infeasible but optimal
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Important Factors
in Location Decisions (1)
Proximity to source of raw materials

Cost and availability of energy and utilities
Cost, availability, skill, and productivity of labor
Government regulations
Taxes
Insurance
Construction costs and land price
Government and political stability
Exchange rate fluctuation
Export and import regulations, duties, and tariffs
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Important Factors
in Location Decisions (2)
Transportation system
Technical expertise
Environmental regulations
Support service
Community services
Weather
Proximity to customer
Business climate
Competition-related factors
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Techniques for
Discrete Space Location Problems
1. Qualitative Analysis
2. Quantitative Analysis
3. Hybrid Analysis
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Qualitative Analysis (1)

(Technique for Discrete Space Location Problems)
It usually using scoring method (subjective

decision making tools), consists of these steps:
Step 1 :
List all the factors that are important that

have impact on the location decision
Step 2 :
Assign an appropriate weight (typically

between 0 and 1) to each factor based on the
relative importance of each
Step 3 :
Assign a score (typically between 0 and 100)

to each location with respect to each factor
identified in step 1
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Step 4 :
Compute the weighted score for each factor

for each location by multiplying its weight by
the corresponding score
Step 5 :
Compute the sum of the weighted scores for

each a location based on these scores
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A payroll processing company has recently won several major

contracts in the midwest region of the U.S. and central
Canada and wants to open a new, large facility to serve these
areas. Because customer service is so importance, the
company wants to be as near its customers as possible.
Preliminary investigation has shown that Minneapolis,
Winnipeg, and Springfield, Illinois, would be the three most
desirable locations and the payroll company has to select one
of these three. A subsequent thorough investigation of each
location with respect to eighnt important factors has
generated the raw scores and weights listed in table 2. Using
the location scoring method, determine the best location for
the new payroll processing facility.
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Solution
Steps 1, 2, and 3 have already been completed for
us. We now need to compute the weighted score
for each location-factor pair (Step 4), and these
weighted scores and determine the location based
on these scores (Step 5).
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Wt.
Factors
Location
Minn. Winn. Spring.
.25 Proximity to customers
.15 Land/construction prices
.15 Wage rates
70 45 60
.10 Property taxes
70 90
.10 Business taxes
80 90
.10 Commercial travel
80
.08 Insurance costs
70 95
.07 Office services
90 90
95 90 65
60 60 90
70
85
65 75
60
80
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From the analysis in above Table, it is clear that

Minneapolis would be the best location based on the
subjective information.
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Wt.
Factors
Location
Minn. Winn. Spring.
.25 Proximity to customers 23.75 22.5 16.25
.15 Land/construction prices
9
9
13.5
.15 Wage rates 10.5
6.75 9
.10 Property taxes
7
9
8.5
.10 Business taxes 8
98.5
.10 Commercial travel 8
6.5 7.5
.08 Insurance costs 5.6
7.6 4.8
.07 Office services
6.3
6.3 5.6
Sum of weighted scores
78.15
76.65 72.15
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Of course, as mentioned before, objective measures

must be brought into consideration especially because
the weighted scores for Minneapolis and Winnipeg are
close.
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Quantitative Analysis
It is appropriate for a specific set of objectives and

constraints :
Minimax location model is approriate for
determining the location of an emergency
service facility, where the objective is to minimize
the maximum distance traveled between the
facility and any customer
Transportation model is approriate for
determining the location of facility, where the
objective is to minimize total distance traveled
between the facility and any customer
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Minimax Location Model (1)

The minimax location problem is given by:
Min f X max x ai y bi , i 1,2, , m
In order to obtain the minimax solution, let

c1 = minimum (ai+bi)
c2 = maximum (ai+bi)
c3 = minimum (-ai+bi)
c4 = maximum (-ai+bi)
c5 = maximum (c2c1, c4c3)
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Optimum solutions to the minimax location
problem can be shown to be all points on the line
segment connecting the point
x , y 0.5 c c , c c
c5
and the point
x , y 0.5 c
c4 , c2 c4 c5
The maximum distance will be equal to c5/2

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Example :
Consider the problem of locating a maintenance
department in a production area. It is desirable to
locate the maintenance facility as close to each
machine as possible, in order to minimize
machine downtime.
Eight machines are to be maintained by crews
from the central maintenance facility. The
coordinate locations of the machine are (0,0),
(4,6), (8,2), (10,4), (4,8), (2,4), (6,4), and (8,8).
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i
ai
bi
ai + bi
-ai + bi
10
10
-6
10
14
-6
12
10
-2
16
c1=0
c2=16
c3=-6
c4=4
c5=16
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The optimum solutions lie on the line segment
connecting the point
x , y 0.5 6, 10 (3, 5)
and the point
x , y 0.512, 4 (6, 2)
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Transportation Model (1)

It is mathematical model (linear programming) that
can be solved using:
1. Optimization methods
Manual: Simplex Algorithm
Software: QSB, LINDO, LINGO, GAMS
2. Heuristic methods
Least cost assignment routine method
Northwest corner rule method
Vogel approximation method
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Minimize Total Transporta tion Cost
m
Z cij xij
i 1 j 1
Subject to
n
ij
ai , i 1,2 ,...,m (supply restriction at warehouse i )
ij
b j , j 1,2,...,n (demand requirement at market j )
j 1
m
x
i 1
xij 0, i,j 1,2 ,...,n (non - negativity restrictions)

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Parameter
cij :
ai :
bi :
cost of transporting one unit from

warehouse i to customer j
supply capacity at warehouse i
demand at customer j
Decision Variables
xij :
number of units transported from

warehouse i to customer j
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Seers Inc. has two manufacturing plants at Albany and Little Rock
supplying Canmore brand refrigerators to four distribution centers in
Boston, Philadelphia, Galveston and Raleigh. Due to an increase in
demand of this brand of refrigerators that is expected to last for several
years into the future, Seers Inc., has decided to build another plant in
Atlanta or Pittsburgh. The expected demand at the three distribution
centers and the maximum capacity at the Albany and Little Rock plants
are given in Table 4. Determine which of the two locations, Atlanta or
Pittsburgh, is suitable for the new plant. Seers Inc., wishes to utilize all
of the capacity available at its Albany and Little Rock Locations
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Bost.
Albany 10
Little Rock
Atlanta 21
Pittsburgh
Demand
Phil.
Galv. Rale. Supply

Capacity
15 22 20 250
19 15 10 9 300
11 13 6 No limit
17 8 18 12 No limit
200 100 300 280
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Bost.
Phil.
Galv. Rale.
Capacity
Albany 10 15 22 20 250
Little Rock 19 15 10 9 300
Atlanta 21 11 13 6 330
Demand
200 100 300 280 880
Supply
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Bost. Phil.
Galv. Rale. Supply

Capacity
Albany 10 15 22 20 250
Little Rock 19 15 10 9 300
Pittsburgh
17 8 18 12 330
Demand 200 100 300 280 880
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Hybrid Analysis
It is a method that incorporates subjective (qualitative) as

well as quantitative cost and other factors
1. Brown Gibson Model (1972)
2. Buffa Sarin Model (1987)
This model classifies the objective and subjective factors
important to the specific location being addressed as:
1. Critical,
2. Objective,
3. Subjective
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Buffa Sarin Model (1)

After the factors are classified, they are assigned
numerical values:
CFij
1 if location i satisfies critical factor j

0 otherwise
OFij
cost of objective factor j at location i
SFij
numeric value assigned (on a scale of 0-1) to

subjective factor j for location i
wj
weight assigned to subjective factor j (0wj

1)
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Determine the overal critical factor measure
(CFMi), objective factor measure (OFMi), and
subjective factor measure (SFMi) for each
location i with these equations:
p
CFM i CFi1 CFi 2 ... CFip CFij
i 1,2 , ... ,m
j 1
max
i
OFM i
max
i
j 1
j 1
OFij OFij
j 1
OFij
min
i
j 1
i 1,2 , ... ,m
OFij
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r
SFM i w j SFij
i 1,2, ... , m
j 1
The location measure LMi for each location is then

calculated as:
LM i CFM OFM i 1 SFM i
where is the weight assigned to the objective
factor measure
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Example
Mole-Sun Brewing company is evaluating six candidate locationsMontreal, Plattsburgh, Ottawa, Albany, Rochester and Kingston, for
constructing a new brewery. There are two critical, three objective and
four subjective factors that management wishes to incorporate in its
decision-making. These factors are summarized in Table following. The
weights of the subjective factors are also provided in the table.
Determine the best location if the subjective factors are to be weighted
50 percent more than the objective factors.
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Location
Factors
Critical
Water
Supply
0
Tax
Incentives
1
Kingston
Montreal
Ottawa
Plattsburgh
Rochester
Albany
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Location
Albany
Critical
Factors
Objective
Labor
Revenue
Cost
185
80
Energy
Cost
10
Kingston
150
100
15
Montreal
170
90
13
Ottawa
200
100
15
Plattsburgh
140
75
Rochester
150
75
11
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Objective
Location
Albany
Factors
Subjective
Community
Ease of
Attitude
Transportation
0.3
0.4
0.5
0.9
Kingston
0.6
0.7
Montreal
0.4
0.8
Ottawa
0.5
0.4
Plattsburgh
0.9
0.9
Rochester
0.7
0.65
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Factors
Subjective
Location
Labor
Unionization
0.25
Support
Services
0.05
Albany
0.6
0.7
Kingston
0.7
0.75
Montreal
0.2
0.8
Ottawa
0.4
0.8
Plattsburgh
0.9
0.55
Rochester
0.4
0.8
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Factors
Critical
Location
Albany
Kingston
Montreal
Ottawa
Plattsburgh
Rochester
Objective
Sum of
Objective
Factors
-95
Subjective
OFMi
SFMi
LMi
0.7
0.7
-35
0.67
0.67
0.4
-67
0.53
0.53
0.53
-85
0.45
0.45
-57
0.88
0.88
0.68
-64
0.61
0.61
0.56
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Brown Gibson Model

See
Tata Letak Pabrik dan Pemindahan Bahan,
Wignjosoebroto, S
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Techniques for Continuous

Space Location Problems
1. Median Method
2. Contour Line Method
3. Gravity Method
4. Weiszfeld Method
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Median Method (1)

(Technique for Continuous Space Location Problems)
The median method finds the median location

(defined later) and assign the new facility to it.
Interaction between the new facility and existing
ones is known
Problem is to minimize the total interaction cost
between each existing facility and the new one.
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Median Method (2)

Notation :
ci
fi
xi , yj
cost of transportation between existing

facility i and new facility, per unit
traffic flow between existing facility i and
new facility
coordinates of existing facility i
Model :
Minimize TC ci f i xi x yi y
m
i 1
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Median Method (3)

Model can be solved using :

1. Algorithm
2. Equivalent linear-constrained model
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Median Method (4)

Algorithm
Step 1 : List the existing facilities in nondecreasing
order of the x coordinates
Step 2 : Find the jth x coordinate in the list (created
in step 1) at which the cummulative weight
equals or exceeds half the total weight for
the first time
j 1
wi
wi and
i 1
i 1 2
wi
wi
i 1
i 1 2
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Median Method (5)

Step 3 : List the existing facilities in nondecreasing

order of the y coordinates
Step 4 : Find the kth y coordinate in the list (created
in step 3) at which the cummulative weight
equals or exceeds half the total weight for
the first time
k 1
wi
wi
and
i 1
i 1 2
wi
wi
i 1
i 1 2
The optimal location of the new facility is

given by the jth x coordinate and the kth y
coordinate in step 2 and 4, respectively
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Median Method (6)

Example :
Two high-speed copiers are to be located on the
fifth floor of an office complex that houses four
departments of the Social Security
Administration. The coordinates of the centroid
of each department as well as the average
number of trips made per day between each
department and the copiers yet-to-bedetermined location are known and given in
Table. Assume the travel originates and ends at
the centroid of each department. Determine the
optimal location the x,y coordinates for the
copiers
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Median Method (7)

Department x Coordinate y Coordinate

Number
Average Number of Daily

Trips to Copiers
10
10
10
10
12
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Median Method (8)

x Coordinates
in Nondecreasing
Order
8
10
14
10
10
24
12
28
Department
Number
Weights
Cumulative
Weights
Cumulative Weights = half of the

total weights (28/2=14)
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Median Method (9)

y Coordinates
in Nondecreasing
Order
2
10
18
10
10
28
Department
Number
Weights
Cumulative
Weights
Cumulative Weights half of the

total weights (28/2=14)
Thus the optimal coordinates of the new facility are (10 , 6)

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Median Method (10)

Transforming the nonlinear-unconstrained model

into an equivalent linear-constrained model
Consider the following notation:
xi x if xi x 0
x
otherwise
0
x xi if xi x 0
x
otherwise
0
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Median Method (11)

We can observe that
xi x x x
xi x xi xi
A similar definition,
yi y y y
yi y y y
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Median Method (12)

Thus the transformed linear model is:
Min
Subject to
w x
n
i 1
x y y
xi x xi xi
yi y y y
xi , xi , yi , yi 0
i 1,2, , n
i 1,2, , n
i 1,2, , n
x , y unrestricted in sign
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Median Method (13)

Solve the problem using LINDO
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Median Method (14)

Solve the problem using LINDO
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Contour Line Method (1)

Step 1 : Draw a vertical line through the x coordinate

and a horizontal line through the y coordinate
of each facility
Step 2 : Label each vertical line Vi, i=1, 2, ..., p and
horizontal line Hj, j=1, 2, ..., q where Vi= the
sum of weights of facilities whose x
coordinates fall on vertical line i and where
Hj= sum of weights of facilities whose y
coordinates fall on horizontal line j
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Step 3 : Set i = j = 1; N0 = D0 = - wi
m
i=1
Step 4 : Set Ni = Ni-1 + 2Vi and Dj = Dj-1 + 2Hj. Increment

i = i + 1 and j = j + 1
Step 5 : If i < p or j < q, go to Step 4. Otherwise, set i =
j = 0 and determine Sij, the slope of contour
lines through the region bounded by vertical
lines i and i + 1 and horizontal line j and j + 1
using the equation Sij = Ni/Dj. Increment i = i
+ 1 and j = j + 1
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Step 6 :
Step 7 :
If i < p or j < q, go to Step 5. Otherwise select

any point (x, y) and draw a contour line with
slope Sij in the region [i, j] in which (x, y)
appears so that the line touches the boundary of
this line. From one of the end points of this line,
draw another contour line through the adjacent
region with the corresponding slope
Repeat this until you get a contour line ending at
point (x, y). We now have a region bounded by
contour lines with (x, y) on the boundary of the
region
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The number of vertical and horizontal lines need not be

equal
The Ni and Dj as computed in Steps 3 and 4 correspond
to the numerator and denominator, respectively of the
slope equation of any contour line through the region
bounded by the vertical lines i and i + 1 and horizontal
lines j and j + 1
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Example
Consider Example 4. Suppose that the weight of facility 2
is not 10, but 20. Applying the median method, it can be
verified that the optimal location is (10, 10) - the centroid of
department 2, where immovable structures exist. It is now
desired to find a feasible and near-optimal location using
the contour line method.
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Solution
The contour line method is illustrated using Figure 1
Step 1: The vertical and horizontal lines V1, V2, V3 and
H1, H2, H3, H4 are drawn as shown. In addition
to these lines, we also draw line V0, V4 and H0,
H5 so that the exterior regions can be identified
Step 2: The weights V1, V2, V2, H1, H2, H2, H4 are
calculated by adding the weights of the points
that fall on the respective lines. Note that for this
example, p=3, and q=4
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4
Step 3 : Since
w
i 1
38
Set N0 = D0 = 38
Step 4 : Set
N1 = -38 + 2(8) = -22; D1 = -38 + 2(6) = -26;

N2 = -22 + 2(26) = 30;D2 = -26 + 2(4) = -18;
N3 = 30 + 2(4) = 38; D3 = -18 + 2(8) = -2;
D4 = -2 + 2(20) = 38;
(These values are entered at the bottom of each
column and left of each row in figure 1)
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Step 5 : Compute the slope of region
S00 = -(-38/-38) = -1; S14 = -(-22/38) = 0.58;

S01 = -(-38/-26) = -1.46; S20 = -(30/-38) = 0.79;
S02 = -(-38/-18) = -2.11; S21 = -(30/-26) = 1.15;
S03 = -(-38/-2) = -19; S22 = -(30/-18) = 1.67;
S04 = -(-38/38) = 1; S23 = -(30/-2) = 15;
S10 = -(-22/-38) = -0.58; S24 = -(30/38) = -0.79;
S11 = -(-22/-26) = -0.85; S30 = -(38/-38) = 1;
S12 = -(-22/-18) = -1.22; S31 = -(38/-26) = 1.46;
S13 = -(-22/-2) = -11; S32 = -(38/-18) = 2.11;
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Step 5 : Compute the slope of region (cont)
S33 = -(38/-2) = 19;

S34 = -(38/38) = -1;
(The above slope values are shown inside each
region.)
Step 6 : When we draw contour lines through point (9,
10), we get the region shown in figure 1.
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Example:
Since the copiers cannot be placed at the (10, 10) location,
we drew contour lines through another nearby point (9, 10).
Locating anywhere possible within this region give us a
feasible, near-optimal solution.
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Gravity Method (1)

The cost function is
Minimize TC
2
2
c
f
(
x
x
)
(
y
y
)
ii i
i
i 1
As before, we substitute wi = ci fi, i = 1, 2, ..., m

and rewrite the objective function as
Minimize TC
i 1
i 1
2
2
w
(
x
x
)
w
(
y
y
)
i i
i i
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Gravity Method (2)

Since the objective function can be shown to be convex,
partially differentiating TC with respect to x and y, setting
the resulting two equations to 0 and solving for x, y provides
the optimal location of the new facility
m
m
TC
2 wi x 2 wi xi 0
x
i 1
i 1
m
x wi xi
i 1
w
i 1
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Gravity Method (3)

Similarly,
m
m
TC
2 wi y 2 wi yi 0
y
i 1
i 1
m
y wi yi
i 1
w
i 1
Thus, the optimal locations x and y are simply the

weighted averages of the x and y coordinates of the
existing facilities
88
Teknik Industri
Gravity Method (4)

Example:
Consider Example 4. Suppose the distance metric
to be used is squared Euclidean. Determine the
optimal location of the new facility using the gravity
method.
89
Teknik Industri
Gravity Method (5)

Department i xi yi
1
2
3
4
wi
wixi
wiyi
10 2 6 60 12
10 10 10 100
8 6 8 64 48
12 5 4 48 20
Total
28
100
272 180
We conclude that :
x 272
28
9.7 and y 180

28
6.4
90
Teknik Industri
Gravity Method (6)

If this location is not feasible, we only need to
find another point which has the nearest
Euclidean distance to (9.7, 6.4) and is a
feasible location for the new facility and locate
the copiers there.
Another way, we can again draw contour lines
from neighboring points to find a feasible,
near-optimal location
91
Teknik Industri
Weiszfeld Method (1)

The objective function for the single facility location
problem with Euclidean distance can be written as:
Minimize TC ci f i ( xi x ) 2 ( yi y ) 2
i 1
As before, substituting wi=ci fi and taking the

derivative of TC with respect to x and y yields
92
Teknik Industri

Although the Weiszfeld method is theoritically
suboptimal, it provides x, y values that are very close to
optimal
For practical purposes the algorithm works very well and
can be readily implemented on a spreadsheet
If the optimal location is not feasible, use the contour line
method to draw contour lines and then choose a
suitable, feasible, near-optimal location for the new
facility
93
Teknik Industri

wi 2( xi x )
TC 1 m

x
2 i 1 ( xi x ) 2 ( yi y ) 2
i 1
i 1
m
i 1
wi xi
( xi x ) 2 ( yi y ) 2
i 1
wi x
( xi x ) 2 ( yi y ) 2
wi xi
( xi x ) 2 ( yi y ) 2
wi
( xi x ) 2 ( yi y ) 2
94
Teknik Industri

wi 2( yi y )
TC
1 m

y
2 i 1 ( xi x ) 2 ( yi y ) 2
i 1
i 1
m
i 1
wi yi
( xi x ) 2 ( yi y ) 2
wi yi
i 1
wi y
( xi x ) 2 ( yi y ) 2
( xi x ) 2 ( yi y ) 2
wi
( xi x ) 2 ( yi y ) 2
95
Teknik Industri

Step 0 : Set iteration counter k=1
m
xk
w x
i 1
m
Step 1 : Set
i i
w
i 1
yk
x k 1
i 1
m
i 1
i 1
m
w
i 1
w y
i
wi xi
( xi x ) ( yi y ) 2
wi
k
( xi x k ) 2 ( yi y k ) 2
96
Teknik Industri

m
k 1
i 1
m
i 1
wi xi
( xi x k ) 2 ( yi y k ) 2
wi
( xi x k ) 2 ( yi y k ) 2
Step 2 : If xk+1 xk and yk+1 yk, Stop. Otherwise,

set k = k + 1 and go to Step 1
97
Teknik Industri

Example:
Consider Example 5. Assuming the distance metric to
be used is Euclidean, determine the optimal location of
the new facility using the Weiszfeld method. Data for
this problem is shown in Table below
98
Teknik Industri

Departements #
1
2
3
4
xi
yi
wi
10
10
8
12
20
10
6
5
6
20
8
4
Using the gravity method, the initial seed can

be shown to be (9.8, 7.4). With this as the
starting solution, we can apply Step 1 of the
Weiszfeld method repeatedly until we find that
two consecutive x, y values are equal.
99
Teknik Industri
Optimal location
100
Facility Location Case Study (1)
Teknik Industri
A small manufacturing company currently located in a

university tech park has witnessed major growth since
introducing an innovative technology into the marketplace.
Its owner now wants to find a new location and build a
bigger facility. In January she hired senior industrial and
management engineering (IME) students at the university
to investigate several potential locations and select the one
that est suits her needs. The student group adopted the
following five-step approach, which based on the hybrid
analysis discussed earlier. (see Heragu, pp 546 551)
101
Facility Location Case Study (2)
Teknik Industri
Step 1 : determine of requirements (the students

conducted interviews with the owner and facility
manager to determine these company-spesific
requirements for the new facility)
Step 2 : classification of location factors (the
requirements classified into three categories)
Step 3 : data collection (this step requires the most time,
but it is very important and should be done carefull)
Step 4 : elimination of sites not meeting critical
objectives and development of a rating chart
Step 5 : site visits and site evaluation
102
Teknik Industri
Selesai
103

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Teknik Industri

Stefanus Eko Wiratno 2012

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Location Problems and Models

Demands and candidate facility locations

Taxonomy of Location Problems and Models

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Taxonomy of Location Problems and Models

Tree problems; a network in which there is at

General graph problem; consists of a connected

Number of Facilities to Locate

Single facility location problem

Multiple facilities location problem

(exogenous: number of facilities is parameter,

Taxonomy of Location Problems and Models

Manhattan or rightangle distance metric

Euclidean or straightline distance metric

TI091314 /Perancangan Fasilitas/2012/#2

Taxonomy of Daskin (1995)

TI091314 /Perancangan Fasilitas/2012/#2

Taxonomy of Brandeau and Chiu (1989)

TI091314 /Perancangan Fasilitas/2012/#2

Taxonomy of Brandeau and Chiu (1989)

TI091314 /Perancangan Fasilitas/2012/#2

Taxonomy of Nagy and Salhi (2007)

TI091314 /Perancangan Fasilitas/2012/#2

Taxonomy of ReVelle et al. (2008)

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Classification of Location Problem

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TI091314 /Perancangan Fasilitas/2012/#2

TI091314 /Perancangan Fasilitas/2012/#2

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Facility Location Problems

Single-facility location problem; deal with the

Multi-facility location problem; deal with the

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Facility Location Problems

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Facility Location Problems

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Proximity to source of raw materials

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Qualitative Analysis (1)

It usually using scoring method (subjective

List all the factors that are important that

Assign an appropriate weight (typically

Assign a score (typically between 0 and 100)

Qualitative Analysis (2)

Compute the weighted score for each factor

Compute the sum of the weighted scores for

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Qualitative Analysis (3)

A payroll processing company has recently won several major

Qualitative Analysis (4)

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Qualitative Analysis (5)

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Qualitative Analysis (6)

From the analysis in above Table, it is clear that

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Qualitative Analysis (7)

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