📕 Production and Operation Management Book Series 📕
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00:00 Starting
01:04 Factor-Rating Method
03:55 Location Break-Even Analysis
06:00 Center-of-Gravity Method
10:16 Transportation Model
Location analysis Techniques/Methods
1.) Factor-Rating Method
2.) Location Break-Even Analysis
3.) Center-of-Gravity Method
4.) Transportation Model
1.) Factor-Rating Method
Popular because a wide variety of factors can be included in the analysis
Six steps include in this method
1.) Develop a list of relevant factors called critical success factors
2.) Assign a weight to each factor
3.) Develop a scale for each factor
4.) Score each location for each factor
5.) Multiply score by weights for each factor for each location
6.) Recommend the location with the highest point score
2.) Location Break-Even Analysis
Method of cost-volume analysis used for industrial locations
This method includes three steps.
1.) Determine fixed and variable costs for each location
2.) Calculate the Total cost for each location
3.) Select location with the lowest total cost for expected production volume
3.) Center-of-Gravity Method
Finds the location of the distribution center that minimizes distribution costs
It will include
1.) Location of markets
2.) The volume of goods shipped to those markets
3.) Place locations on a coordinate Graph or Chart.
4.) Calculate X and Y coordinates for ‘center of gravity’
4.) Transportation Model
1.) Finds the amount to be shipped from several points of supply to several points of demand.
2.) The solution will minimize total production and shipping costs.
3.) The location with minimum total transportation cost will be selected.