What are the options for location decision?

Five methods of single facility location;

Single facility location refers to the independent choice of new facility location, and its operation is not affected by the existing facility network of the enterprise. In some cases, the new facility to be located is part of the existing facility network. For example, a catering company wants to open a new restaurant, but the restaurant operates independently of other existing restaurants. This situation can also be considered as a single facility location. The site selection of a single facility can be divided into the following methods:

1. Load distance method

The goal of the load distance method is to select a target scheme from several candidate schemes to minimize the moving distance of the total load (goods, people or others). When factors such as proximity to the market are crucial, this method can quickly select the most attractive scheme from many candidate schemes. This method can also be used for facility layout.

2. Factor scoring method

Among the commonly used site selection methods, the factor scoring method is probably the most widely used, because it integrates various factors in a simple and easy-to-understand way. When using this factor scoring method, we should pay attention to: in the process of using factor scoring method, we can feel that the determination of weight and grade score depends entirely on people's subjective judgment, as long as there is an error in judgment, it will affect the scoring value and ultimately affect the possibility of decision-making. There are many methods to determine the weight, and the more objective and accurate method is analytic hierarchy process, which is not complicated to operate and has strict scientific basis. We suggest that analytic hierarchy process (AHP) should be used as much as possible in multi-scheme and multi-factor evaluation.

3. Profit and loss analysis method

Profit and loss analysis is the basic method of factory location, also known as comparative analysis of production costs. This method is based on the following assumptions: all alternative schemes can meet the basic requirements of site selection, but the investment of each scheme is different, and the variable costs of raw materials, fuel and power are also different after production. At this time, the principle of break-even analysis can be used to compare the production cost after production.

4. Position measurement method

Location measurement method is a method to support the location of facilities, and both quantitative and qualitative factors are considered.

5. Center of gravity method

The center of gravity method is a method of arranging individual facilities, which takes into account the distance between existing facilities and the quantity of goods to be transported. It is often used to select intermediate warehouses. In the simplest case, this method assumes that the import and export costs are equal, and does not consider the special transportation costs increased under the condition of not being fully loaded.