Methods for Selecting and Determining Plant Locations

Ranking Procedure Method

Qualitative or subjective. This method is applied in solving problems that are difficult to quantify. There are several procedures that are carried out based on the analysis step, among others.

Identification of relevant and significant factors related to the process of selecting plant locations, including the location of raw material supply, location of marketing areas and others.

Give weight to each of the factors that have been identified based on the degree or weight of interest (weighted procedure).

Conduct a score (score) on the factors identified for each alternative location to be evaluated. Values ​​

are given on a scale of numbers based on a range between 0 to 10, where the best value is 10.

Calculate the total value for each alternative location based on the total weight value multiplied by the largest total lateral location value.

This method looks very simple and quick to implement, but the main difficulty is determining the weight of each factor evaluated because it has a subjective impression.

Gravity Center Analysis Method

Production facilities at optimal locations can be affected by the source of materials needed to input (production) production activities or the location of the marketing area where outputs of production must be distributed. This method is made by calculating the distance of each material source location or marketing area with the planned factory location. Production and distribution costs for each location are the same or can be ignored.

Linear Program Analysis Method of Transportation

This method is applied based on to solve the problem of selecting or determining alternative plant locations. The transportation formulation is used to determine the best distribution pattern from the factory location to a particular marketing area, then the total cost is calculated and evaluated. There are several methods used in solving transportation problems, including the heuristics method or the least cost assignment routine method.

The heuristics method aims to minimize the total cost for the allocation of product supply distribution at each destination location. Where by considering the structure of transportation or distribution costs (combined production costs), the allocation of supply from each to meet the needs of the main destination location in a row from the smallest cost to obtain the smallest transportation costs. This heuristics method is very easy, simple and always starts from the smallest cost but does not guarantee optimal results.

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