Industrial Engineering Department – ITS, 2011

LOCATION & ALLOCATION PROBLEM

Facilities Planning
 Some reasons to apply location analysis

1. Expansion of Business
2. Decentrallization of Production Plant
3. Material Shortage
4. Reallocation of Plant
Facilities Planning
 Some Considering Factors in Location Analysys

• Location and potensial demand of Market

• Location and supply capacities of Raw
Material
• Transportation Facilities
• Source of Energy
• Labor wages and standard
• Tax ad regulation from local goverment
Facilities Planning

• Social and Culture

• Source of water
• Waste water treatment
 Some mistake on location analysis

• Less of Information
• Not consider the significant factors
• Subjective decision by the project owner
• Tend to build on existing land (home land) rather
than select the new location.
• Saturated land
• Tend to choose the cheapest cost of land
Facilities Planning
 SOME TECHNIQUES FOR LOCATION
PROBLEM
Facilities Planning

Rahmanarief@gmail.com 5
 A. RANKING PROCEDURE

• Considering subjective and objectives criterias

• Easy to apply for practical purpose of implementation
• Several experts must be involved to minimize the error of decision

Procedures:
1. Define alternatives of location (j)
2. Identify some decision factors ( Yij ).
3. Involving several expert to determine the weight of each decision factors ( W i ).
4. Score each alternatives of location (j). Using scale of range 0 – 10 point where the
highert or the best score is 10.
5. Calculate the total score for each alternatives.
Facilities Planning

Zj = (Wi x Yij)
The highest (Zj) will b choosen as the best solution or decision
 Example:

There are 3 alternatives of Location as follows:

• Location 1 = Sidoarjo
• Location 2 = Pasuruan
• Location 3 = Krian

3 decision factors are Supply of Materials, Employee and

Transportation

Weight of each factors are :

Supply of Materials = 40%
Facilities Planning

Employee = 35% Total = 100%

Transportation = 25%
 Scoring Board:

Sidoarjo Pasuruan Krian

Factors
Supply of Materials(40%) 8 5 7
Employee(35%) 7 8 4
Transportation (25%) 9 7 8

Total Scores :
ZSidoarjo = (40% x 8) + (35% x 7) + (25% x 9) = 7,9
Fasilitas

ZMojokerto = (40% x 5) + (35% x 8) + (25% x 7) = 6,55

Planning

ZKrian = (40% x 7) + (35% x 4) + (25% x 8) = 6,2

Perencanaan

The best solution is Sidoarjo with score =7,9

Facilities
 B. CENTER OF GRAVITY
• Calculating the Euclidian distance source or market (i) to location (j).
• Demand or Supply will be estimated as the weight (w) of each Source or
Market.

Formula:

W X 
 a j   Yi  B j  ......min
m n
2 2
j i
i 1 j 1
Fasilitas
Planning

m = number of alternatives of location

Perencanaan

n = number of sources or market

(Xi , Yi) = alternatives coordinates
Facilities

(aj , bj) = source or market coordinates

Wj = quantity of supply or demans
 Example:
Determine the location of new plant based on X-Y graph as belows
sumbu Y (Km)

Sumber A
(8,18)

Sumber C
Alternatif 1 (25,15)
(18,14)

Supply capacity of Source A =10 Ton/day

Supply capacity of Source B =8 Ton/day
Alternatif 2
Supply capacity of Source C =12 Ton/day
(14,9)
Supply capacity of Source D =4 Ton/day
Fasilitas

Alternatif 3
Planning

(9,6)
Perencanaan

Sumber D
Sumber B (21,3)
Facilities

(4,2) sumbu X (Km)

 Alternative 1:
 
Z alternatif1  (10 (18  8) 2  (14  18) 2 )  (8 (18  4) 2  (14  2) 2 )  (12 (18  25) 2  (14  15) 2 )  (4 (18  21) 2  (14  3) 2 )

Zalternative 1 = {(10 x 10.7)+(8 x 18.4)+(12 x 7.07)+(4 x 11.4)

= 384.64
Alternative 2:

Z alternatif 2  (10 (14  8) 2  (9  18) 2 )  (8 (14  4) 2  (9  2) 2 )  (12 (14  25) 2  (9  15) 2 )  (4 (14  21) 2  (9  3) 2 ) 
Zalternative 2 = {(10 x 10.8)+(8 x 12.2)+(12 x 12.5)+(4 x 9.21)
= 392.44

Alternative 3:

Z alternatif 3  (10 (9  8) 2  (6  18) 2 )  (8 (9  4) 2  (6  2) 2 )  (12 (9  25) 2  (6  15) 2 )  (4 (9  21) 2  (6  3) 2 ) 
Fasilitas
Planning

Zalternative 3 = {(10 x 12.04)+(8 x 6.4)+(12 x 10.8)+(4 x 12.36)

= 350>6
Perencanaan
Facilities

The best solution is Location No 3 where the minimum Z = 350.6

 C. BROWN-GIBSON APPROACH
• Applying the “Preference of measurement”
• Considering 3 factors i.e.: Critical, Subjective, and Objective factors.
• Combining Subjective and Objective factors with specific weighting number.

Procedures:
1. Define several alternative of locations
2. Eliminate the alternatives if not feasible follow the critical factors
threshold value. Example: Water supply capacity minimum 1000 kliters/day

2. Determine the Performance of measurements of Objective Factors(OF)

1
OFi 
Facilities Planning

 1 
C i ( Ci )
 
Ci is the total annual cost for alternative i
 Example of objectives data:

Yearly Cost (Rp,1,000,000,000,-) Total

(Ci) 1/Ci
Alternative Labor Distribution Tax Others

Location A 3,62 2,08 0,25 4,0 9,95 0,100503

Location B 3,4 2,75 0,3 4,0 10,45 0,095694

Location C 3,75 2,9 0,4 4,0 11,05 0,090498

Total: 0,286695

1
Fasilitas

1 1
OFA = 9,95 x0,286695  OFB =
10,45 x0,286695  OFC =
11,05 x0,286695 
Planning

= 0,35056 = 0,33378 = 0,31566

Perencanaan
Facilities

Total OFi = 0,35056 + 0,33378 + 0,31566  1

 3. Determine the Subjective Factors (SFi)

SFi = (W1xR1)+ (W2xR2)+(W3xR3)+...+ (WixRi)

W i = weight for each subjective factorsn
Ri = rating of factor for each alternatives.

• Comparison roles:
• If A is more important than B then A=1 and B=0
• If A is equally important with B then A=1 and B = 1
Perencanaan
Facilities Fasilitas
Planning
 Example for subjective factors:
3 subjective factors are :
a. Educational facilities (EF)
b. Housing facilities (HF)
c. Social Cultural (SC)
Some expert conclude that :
 EF is more important that HF
 EF is equally important with SC
 SC is more important that HF

Pairwise Comparation
Subjective Total
Factors HF HF SC Score Wi
Fasilitas

EF 1 1 1 3 0,43
Planning

HF 0 1 0 1 0,14
Perencanaan

SC 1 1 1 3 0,43
Facilities

7 1,00
 Pairwise comparison for each alternative of location

Educational Facilities
Pairwise Comparation
Alternative Total
A B C Score Ri
A 1 1 0 2 0,33
B 0 1 0 1 0,17
C 1 1 1 3 0,50 Social Cultural
Total 6 1,00 Pairwise
Comparation Total
Alternative Score
A B C Ri
Housing Facilities A 1 1 0 2 0,33
Pairwise Comparation
Alternative Total B 0 1 1 2 0,33
A B C Score Ri
C 1 0 1 2 0,33
Fasilitas

A 1 1 1 3 0,50
Planning

B 0 1 0 1 0,17 6 1,00
C 0 1 1 2 0,33
Perencanaan

6 1,00
Facilities
 Total score for subjective are:

SFA = (0,43x0,33) + (0,14x0,5) + (0,43x0,33) = 0,3538

SFB = (0,43x0,17) + (0,14x0,17) + (0,43x0,33) = 0,2388
SFC = (0,43x0,50) + (0,14x0,33) + (0,43x0,33) = 0,4031
Total SF = 0,3538 + 0,2388 + 0,4031  1

4. Define the weight (k) of Objective and Subjective factors

• If objective factors’s weight = 0.8, then the subjevtive factors’s weight = (1-
0.8)
Fasilitas

5. Tahapan terakhir dalam metode ini adalah menentukan nilai LPM (Location
Planning

Preference Measure) dengan menggunakan rumusan sbb :

Perencanaan

LPMi = k (OFi) + (1-k) (SFi)

Facilities
 LPM
If the OF’s weight = 0.8 and the SF’s weight = 0.2, the calculation of LPM will be
calculate as below :

LPMA = (0,8 x 0,35056) + (0,2 x 0,3538) = 0,351208 (Best Solution)

LPMB = (0,8 x 0,33378) + (0,2 x 0,3538) = 0,337784
LPMC = (0,8 x 0,31566) + (0,2 x 0,3538) =0,323288

Total LPM = 0,351208 + 0,337784 + 0.323288  1

Alternatives A has choosen as the best alternative with LPM = 0.35

Perencanaan
Facilities Fasilitas
Planning
 D. WEISZFELD METHOD

 Quantitative approach to determine the best

location for one or more that facilities.
 Using Euclidean distance
 Each location must be defined its coordinates
Facilities Planning
 Example:
2 new facsimile machines will be utilize by 4 departements. Location for each
department depicted as below table.

Koordinat X Koordinat Rata-rata jumlah permakaian

Departemen (Xi) Y (Yi) mesin fax (Wi)

1 10 2 6
2 10 10 20
3 8 6 8
Facilities Planning

4 12 5 4
 Objective function

MINIMIZE

m
TC   ci . f i .( ( xi  x)  ( yi  y ) )
2 2

i 1

TC = Total Cost
c = handling cost
wi  ci . f i
f = flow or frequency of movement
x = facility location on x axis
Facilities Planning

y = facility location on y axis

m = number of installed equipment
w = demand or supply number
 New location of facilities on x axis
m wi .xi 
 
 i 1 ( xi  x) 2  ( yi  y ) 2 
x
m wi 
 
 i 1 ( xi  x) 2  ( yi  y ) 2 

New location of facilities on y axis

m wi . yi 
 
 i 1 ( xi  x) 2  ( yi  y ) 2 
Facilities Planning

y
m wi 
 
 i 1 ( xi  x) 2  ( yi  y ) 2 
 3 step iteration (illustration)
step 0 :
* Set k = 1
m m

k
 w .x i i
k
 w .y i i
x  i 1
m y  i 1
m

w
i 1
i w i
i 1

Step : m 
wi .xi m 
* Set new x,y    wi . yi 
 i 1 k 2 k 2   i 1 
( x  x )  ( y  y ) k 2 k 2
    
k 1 ( x x ) ( y y )
 
i i k 1
x y
i i
m  m 
 wi  wi
 
 i 1 k 2 k 2   i 1 
 ( x  x )  ( y  y )  ( x  x
k 2
)  ( y  y
k 2
)
i i
 
Facilities Planning

i i

Step 2 :
k 1 k k 1 k
•If x x dan y  y , then stop. If not, then set = k+1. repeat step 1
 Iteration no 1

Dept xi yi wi wi . x i wi.yi
1 10 2 6 60 12
2 10 10 20 200 200
3 8 6 8 64 48
4 12 5 4 48 20

 38 372 280

60  200  64  48
0
Facilities Planning

x   9 .8
6  20  8  4
0 12  200  48  20
y   7 .4
6  20  8  4
 [e] =
wi. xi wi.yi ( xi –x0 )2 ( yi –y 0 )2 Akar
Dept xi yi wi [a] [b] [c] [d] ([c]+[d]) [a] / [e] [b] / [e] wi / [e]

1 10 2 6 60 12 0.04 28.82 5.37 11.16 2.23 1.11

2 10 10 20 200 200 0.04 6.93 2.63 75.75 75.75 7.57

3 8 6 8 64 48 3.20 1.87 2.25 28.40 21.30 3.55

4 12 5 4 48 20 4.89 5.61 3.23 14.81 6.17 1.23

 38 372 280 130.15 105.47 13.47

130 .15
1
x   9.7
Facilities Planning

13.47
105 .47
1
y   7.8
13.47
 TOTAL COST Iterasi 1
( xi –x1 )2 ( yi –x1 )2 [h]=akar
wi [f] [g] ([f]+[g]) TC1=(wi.[h])
6 0.12 33.93 5.83 35.0
20 0.12 4.73 2.20 44.0
8 2.74 3.33 2.46 19.7
4 5.49 7.98 3.67 14.7

38 113.4
Facilities Planning

Karena x1 tidak sama dengan x0 dan y1 tidak sama dengan y0 maka

Lakukan kembali iterasi ke-2 mulai dari langkah ke2.
 Iterasi ke- x y TC
Complete iteration using
ms.Excel 1 9.7 7.8 113.4
2 9.7 8.2 111.9
3 9.8 8.4 110.8
4 9.8 8.7 109.9
5 9.8 8.9 109.1
6 9.9 9 108.5
7 9.9 9.2 108
8 9.9 9.3 107.6
9 9.9 9.4 107.2
10 9.9 9.5 106.9
11 9.9 9.6 106.7
Solution is (10,10)
12 10 9.6 106.5
Facilities Planning

… … … …
20 10 9.9 105.6
… … … …
25 10 10 105.5
 Set Covering Model

 Arises when it is necessary to ensure that each

customer is covered by at least one services facility.
 E.g..: Fire stations have to be located so that each
populations area or customers is within a certain
range of distance from at least one facility.
 If a customer within the desired range, we say the
customer is covered.
Facilities Planning
Facilities Planning
Model
 Greedy Heuristics for Set Covering Problem

 Step1 : If cj=0 for any j= 1,2,3, …n, set xj=1 and remove all
constraints in which xj appears with a coefficients of +1
 Step 2 : If cj > 0, for any j= 1,2,3, …n, does not appear with a+1
coeffiecient in any of the remaining constraints, set xj =0
 Step 3: For each of the remaining variables, determines cj/dj,
where dj is the number of constraints in which xj appears with a-1
coefficient. Select the variables k for which ck/dj is minimum, set
xk=1, and remove all constrains in which xj appears with a+1
coefficients. Examine the resulting model.
Facilities Planning

 Step 4: If there are no more constraints, set all the remaining

variables to zero. Otherwise, go to step 1.
 Example

A rural Country administration wants to locate

several medical emergency response units so that
they can respond to any call in the country within 8
minutes. The country is divided into 7 populations
zones. The distance matrix attached. The response
unit can bel located in the centres of zones 1-7 at cost
of 100, 80, 120, 110, 90, 90, and 110 (in $10.000s).
Assuming the average travel speed during an
Facilities Planning

emergency is 60 miles/hour. Solve this problem using

Set Covering Model
Facilities Planning
Distance Matrix
 Binary Distance Matrix

aij  1 : if zone i’s centre can be reached form the centre zone j within 8 mins
0 : otherwise
Facilities Planning
 Mathematical Model

 Minimize
100x1 + 80x2 + 120x3 + 110x4 + 90x5 + 90x6 + 110x7
 Subject to
x1 + x2 + x4 + x7 >= 1
x1 + x2 + x5 + x6 + x7 >= 1
x3 + x4 + x5 + x6 >= 1
x3 + x4 + x7 >= 1
x2 + x3 + x5 + x6 >= 1
Facilities Planning

x2 + x3 + x5 + x6 >= 1
x1 + x2 + x4 + x7 >= 1
X1,x2,x3 ,x4,x5,x6,x7 = 0 or 1