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Krajewski OM11ge C13
Krajewski OM11ge C13
Krajewski OM11ge C13
and
Logistics
Chapter 13
Euclidean distance:
Rectilinear distance:
|20
dAB = |xA xB| + |yA y 80| + |10 60| = 110
B| =
li xi li y i
i i
x* = y* = li
li
i i
Ashland, KY (11, 7)
35,000
Kingsport,
(12, 4)
The center of gravity is calculated as TN 9,000
5 +below:
shown l92
i = + 70 + 35 + 9 + 227 + 16
Akron, OH+ 153 = 607
227,000 11)
(13,
i
li x+
5(7) i =
Wheeling, (14,
92(8) + 70(11) + 35(11) + 9(12) + 227(13)
WV 16,000 10)
i
+ 16(14) + 153(15) = 7,504Roanoke,
(15, 5)
li xi VA 153,000
i 7,504
x* = li = = 12.4
607
i
Copyright 2016 Pearson Education, Limited. 13-12
Example 13.1
x, y
Customer Tons
Coordinate
What is the center of Location Shipped
s
gravity for the Three
Rivers, MI 5,000
(7, 13)
electric utilities Fort Wayne,
(8, 12)
supplier? IN 92,000
Columbus, (11,
OH 70,000 10)
Ashland, KY (11, 7)
35,000
li yi +
5(13) = 92(12) + 70(10) + Kingsport,
35(7) + 9(4)
TN 9,000+ 227(11)
(12, 4)
i
+ 16(10) + 153(5) = 5,572Akron, OH (13,
227,000 11)
li yi Wheeling, (14,
i 5,572 WV 16,000 10)
y* = li = = 9.2
607 Roanoke,
(15, 5)
i VA 153,000
Ashland, KY (11, 7)
35,000
The resulting load-distance score is
Kingsport,
(12, 4)
ld = lidi =
5(5.4 + 3.8) +TN92(4.4 +9,000
2.8) + 70(1.4
i
+ 0.8) + 35(1.4 + 2.2)
Akron, OH +227,000 + (13,
90(0.411)
5.2) + 227(0.6 + 1.8) + 16(1.6 + 0.8)
Wheeling, (14,
WV 16,000 10)
+ 153(2.6 + 4.2)
Roanoke,
= 2,662.4
d = |x x*| + |y y*|
VA 153,000
(15, 5)
Where i i i
or
dAB = (xA xB)2 + (yA yB)2 =
Copyright 2016 Pearson Education, Limited. 13-14
Application 13.2
Management is investigating which location would be best
to position its new plant relative to two suppliers (located
in Cleveland and Toledo) and three market areas
(represented by Cincinnati, Dayton, and Lima).
Management has limited the search for this plant to those
five locations. The following information has been
collected. Which is best, assuming rectilinear distance?
li xi
i
[(20 11) + (15 12) + (30 4)]
x* = = = 8.0
li (20 + 15 + 30)
i
li y i
i
[(20 8.5) + (15 9.5) + (30 1.5)]
y* = = = 5.5
li (20 + 15 + 30)
i
We should no
A best B best C best
longer consider
| | | | | | | | | | | |
0 2 4 6 8 10 12 14 16 18 20 22
Fs + c s Q = FB + c B Q Boardwalk
400 St Charles Place
FB Fs
Q=
cs cB
Total Cost
300
$60 $360 Marvi
= n
$10 $60
Garde
200 ns Baltic Avenue
300
= = 6 months
50
100
The short answer:
Baltic Avenue if 6
months or less, St. | | | | | | | | |
Charles Place if 0 1 2 3 4 5 6 7 8
Months
longer
Copyright 2016 Pearson Education, Limited. 13-26
Transportation Method
Transportation method for
location problems
A quantitative approach that can
help solve multiple-facility location
problems
900
Requirements 200 400 300
900
Figure
13.4
Copyright 2016 Pearson Education, Limited. 13-29
Transportation Method
Dummy plants or warehouses
The sum of capacities must equal the sum of
demands
If capacity exceeds requirements we add an
extra column (a dummy warehouse)
If requirements exceed capacity we add an
extra row (a dummy plant)
Assign shipping costs to equal the stockout
costs of the new cells
Finding a solution
The goal is to find the least-cost allocation
pattern that satisfies all demands and
exhausts all capacities.
Copyright 2016 Pearson Education, Limited. 13-30
Example 13.3
The optimal solution for the Sunbelt Pool
Company, found with POM for Windows, is
shown below and displays the data inputs,
with the cells showing the unit costs, the
bottom row showing the demands, and the
last column showing the supply capacities.
Figure
13.5a
Figure
13.5c
Figure
13.6
Copyright 2016 Pearson Education, Limited. 13-34
What is a GIS?
GIS
Geographical
Information
System
A system of computer
software, hardware,
and data that the
firms personnel can
use to manipulate,
analyze, and present
information relevant
to a location decision.
Copyright 2016 Pearson Education, Limited. 13-35
The GIS Method
for Locating Multiple Facilities
A five step GIS framework
Step 1: Map the data
Step 2: Split the area
Step 3: Assign a facility location
Step 4: Search for alternative sites
Step 5: Compute ld scores and
check capacity
Inventory pooling
A reduction in inventory and safety stock because of
the merging of variable demands from customers
Forward placement
Locating stock closer to customers at a
warehouse, DC, wholesaler, or retailer
Copyright 2016 Pearson Education, Limited. 13-37
A Systematic Location
Selection Process
= 100 + 60 + 60 + 60 + Employee
10 + 50preferences 10 5
= 340
The
Location Weigh Sesame Ronalds
Neighborhoo
Factor t Street Playhouse
d
0.5 0.9 0.8
Material
0.1 5 1.8 9 1.6 8 0.8
Supply
Quality of 3.0 1.8 2.4
0.2 9 8 4
Life
1.2 1.6 2.8
Mild
0.3 10 6.5 6 5.9 8 6.8
Climate
Labor Skills 0.4 3 4 7
2,416,462.81
y* = 30,190 = 80.0418
Figure
13.9
Copyright 2016 Pearson Education, Limited. 13-44
Solved Problem 2
The operations manager for Mile-High Lemonade narrowed the
search for a new facility location to seven communities. Annual
fixed costs (land, property taxes, insurance, equipment, and
buildings) and variable costs (labor, materials, transportation,
and variable overhead) are shown in the following table.
Table 13.2
6 Break-
Golden
even
point
4
Break-
even
2 point
Fort Collins Boulder Denver
| | | | | | |
0 1 2 3 4 5 6
2.67
Barrels of lemonade per year (in hundred thousands)
Figure
13.10
Copyright 2016 Pearson Education, Limited. 13-47
Solved Problem 2
a. Aurora and Colorado Springs are
dominated by Fort Collins, because both
fixed and variable costs are higher for
those communities than for Fort Collins.
Englewood is dominated by Golden.
$4.0
6,000 $5.0
4,000 $5.2
Cherry 0 0 7 10,000
Creek
$4.1 6,000
$4.5 12,000
$3.7
Dee Creek 3 0 5 18,000