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Mathematical Models for

Facility Location
Prof Arun Kanda
Department of Mech Engg
Indian Institute of Technology, Delhi
A Case Study

A Decision Model for a Multiple


Objective
Plant Location Problem

Prem Vrat And Arun Kanda

INTEGRATED MANAGEMENT, July 1976, Page 27-33


Objective of Location

To set up a straw board plant (Packaging


material) from industrial waste

Plant

Sources of Industries needing


Industrial waste packaging material
Relevant Factors for Plant Location
Notation Factor
A Nearness to raw material source
B Availability and dependability
of power
C Transport facilities
D Labour supply
E Employee facilities
F Competition for the market
G Nearness to market
H Govt. Incentives
I Cost of land
Objectives
.
Weightages O1 O2 . On Measures of
to various (W1) (W2) (Wn) effectiveness of
objectives various alternatives
. n
A1 P11 P12 P1n E 1 P1 jW j
j 1
n
A2 P21 P22 P2n E 2 P 2 jWj
j 1
. . .
ALTERNATIVES


. . .

. . .
. . .

n
Am Pm1 Pm2 pmn Em PmjWj
j 1
Triangular Matrix
O2 O3 .. On Scores

O1 O1 - 2 S1

O2 S2

O3 On Sn
Applying Pareto Principle
B C D E F G H I
A A-2 A-1 A-3 A-3 F-1 A-2 A-2 A-3
B C-1 B-1 B-3 F-2 G-2 H-2 I-1
C C-1 C-3 F-2 G-1 H-1 C-1
D D-3 F-3 G-2 H-2 I-2
E F-3 G-3 H-3 I-3
Major difference = 3 F F-1 F-1 F-1
Medium difference=2 G H-2 I-1
Minor difference = 1 H H-2
SUMMARY
Notation Factor Total weightage
Points factor(%)
A Nearness to raw material source 16 23.0
B Availability and dependability of 4 5.7
power
C Transport facilities 6 8.6
D Labour supply 3 4.3
E Employee facilities 0 0.0
F Competition for the market 14 20.0
G Nearness to market 8 11.4
H Govt. Incentives 12 17.0
I Cost of land 7 10.0
Total 10 100
Decision Matrix for Alternative Locations
A B C D F G H I Total
Points
Alternative .230 .057 .086 .043 .200 .114 .170 .100
Location
Panipat 90 80 100 50 100 50 90 90 86.01
Sonepat 80 100 80 70 100 85 80 85 85.98
Rohtak 100 80 90 70 100 60 100 100 *91.16
Meerut 90 50 80 90 80 60 70 60 75.05
Faridabad 50 60 90 100 50 100 50 50 61.87
Gurgaon 55 65 50 60 100 95 60 70 71.26
Ghaziabad 60 50 80 100 60 90 50 60 64.60
* Optimal Location.
Normalization I

80

P
Points

20

L C H
Normalization II

D A
80
C1
Points

C2
20
B

L L H
Normalization III

80
Points

60

20

| Restive | Satisfactory Cooperative |


Normalization IV

On
.
Points

.
.
O2
O1

X1 X2 - - - - - - Xn
Mathematical Models for
Facility Location
Single Facility Location
New lathe in a job New airfield for a
shop number of bases
Tool crib in a factory Component in an
New warehouse electrical network
Hospital, fire station, New appliance in a
police station kitchen
New classroom Copying machine in a
building on a college library
campus New component on a
control panel
Problem Statement
m existing facilities at locations
P1(a1,b1), P2(a2,b2) Pm(am,bm)
New facility is to be located at point X (x,y)
d(X,Pi) = appropriately defined distance between
X and Pi
Euclidean, Rectilinear, Squared Euclidean
Generalized distance, Network
The objective is to determine the location X so
as to minimize transportation related costs
Sum (i=1,n) wi d(X,Pi), where wi is the
weight associated with the ith existing facility
(product of Cost/distance & the expected
number of annual trips between X and Pi)
Single Facility Location
P3 (w3)

Pn-1 (wn-1)
d(X,P3)
P2 (w2)
d(X,P2)
d(X,P n-1)

X
d(X,Pn)
d(X,P1)
P1 (w1)
Pn (wn)
Commonly Used Distances
Pi (ai,bi)

Rectilinear: | (x-ai) | +| (y-bi)|

X (x,y)
Pi (ai,bi)
Euclidean : [ (x-ai)2 + (y-bi)2]1/2

Squared
Euclidean: [(x-ai)2 +(y-ai)2 ] X (x,y) Pi(ai,bi)

Other , Network

X (x,y)
Rectilinear Distances

Z = Total cost
= Sum (i =1,n) [ wi | (x-ai) + (y-bi)|]
= Sum (i=1,n) [wi |(x-ai)| + wi |(y-bi)| ]
= Sum (i=1,n) wi |(x-ai)| +
Sum (i=1,n) wi |(y-bi)|
= f1(x) + f2(y)
Thus to minimize Z we need to minimize
f1(x) and f2(y) independently.
Example 1
(Rectilinear Distance Case)
A service facility to serve five offices
located at (0,0), (3,16),(18,2) (8,18) and
(20,2) is to be set up. The number of cars
transported per day between the new
service facility and the offices equal 5, 22,
41, 60 and 34 respectively.
What location for the service facility will
minimize the distance cars are transported
per day?
Solution (x-coordinate)
Existing x- Weight Cumulative
facility coordinate weight
value
1 0 5 5

2 3 22 27< 81

4 8 60 87> 81

3 18 41 128

5 20 34 162

x* = 8
Solution (y-coordinate)
Existing y- Weight Cumulative
facility coordinate weight
value
1 0 5 5

3,5 2 41+34 80< 81

2 16 22 102>81

4 18 60 162

y* = 16
Example 2
Squared Euclidean Case
CENTROID LOCATION

x* = wi ai / wi =( 0 x5 + 3x22 + 18x41 + 8x60 + 20x34)/162

= 12.12

y* = wibi/ wi = (0x5 + 16x22 + 2x41 + 18x60 + 2x34)/162

= 9.77

(Compare with the median location of (8,16)


Rm

R2
m
P Mn
R1
2 m+n
M2

M1
1 m+2

m+1
Minimax Problems

For the location of


emergency facilities
our objective would
be to minimize the
* maximum distance
Cost Contours
Increasing Cost

Cost Contours
help identify alternative
feasible locations
Summary

Decision Matrix approach to handle


multiple objectives in Plant Location
(problem of choosing the best from options)
Single Facility Location Models
Rectilinear distance
Squared Euclidean
Euclidean distance
(to generate the best from infinite options)
Summary (Contd)

Notion of Minisum and Minimax problem


(Objective depending on the context)
Use of Cost Contours to accommodate
practical constraints
(Moving from ideal to a feasible solution)