Facility location strategies - Case Study Example

Facility location in a central place does not mean it should be located centrally literally. It means locating it in a place, which gives access to all the customers with minimum costs. Sometimes located a facility in a single area with many customers may lock out other customers due to resulting distance that will arise. However, remember the objective of locating a facility is to serve all the customers. The process of finding the ideal place to locate a facility can be tricky. However, a number of methods have been used and they have proved successful.

These methods include weighted load-distance method, centre of gravity, linear programming, weighted scores and break-even analysis (Suresh, 2009). This report will focus on using the weighted average method to locate the best place to put up a European facility for a US automobile company. The report took a number of location factors, which include location, geography, transportation, proximity to customers and the relative costs of supplying the goods to these destinations. In addition, these locations were ranked on a scale of 0 – 1 based on the said factors, depending on relative importance.

After ranking, each location was then scored on a scale of 0 – 100 and this also depended on how important the location was depending on the factors listed.