An example of location selection (1).pptx

Location selection

1. A manufacturer of garments is actively considering 5 alternative locations fro setting up its factory. The locations vary in terms of their advantages to the firm. Hence, the firm requires a method of identifying the most appropriate location. Based on a survey, the firm had arrived at 6 factors to be considered for the final state selection. The ratings of each factor on a scale of 1 to 100. Using this information obtain a ranking of the alternative solutions.

2. Factor ratings Factors Rating 1. Availability of infrastructure 90 2.Size of the Market 60 3.Industrial Relations Climate 50 4.Tax Benefits & Concessions 30 5.Availability of cheap labor 30 6.Nearness to port 65

3. Rating of each location against each factor Factors Loc.1 Loc.2 Loc.3 Loc.4 Loc.5 1 20 40 60 35 55 2 30 30 40 60 80 3 80 30 50 60 50 4 80 20 10 20 20 5 70 70 45 50 50 6 20 40 90 50 60

4. Factors Rating Relative weights 1 90 90/325 = 0.28 2 60 60/325 = 0.18 3 50 0.15 4 30 0.09 5 30 0.09 6 65 0.20 Sum of all factor ratings 325 1.00

5. Overall Rating for location 1 = 20*0.28 +30*0.18+ 80*0.15 + 80*0.09 + 70*0.09 + 20*0.20 = 41.23 Similarly for Loc. 3 =60*0.28 + 40*0.18 + 50*0.15 + 10*0.09 + 45*0.09 + 90*0.20 = 54.45

6. Factors Wt Loc 1 Loc 2 Loc 3 Loc 4 Loc 5 1 .28 20 40 60 35 55 2 .18 30 30 40 60 80 3 .15 80 30 50 60 50 4 .09 80 20 10 20 20 5 .09 70 70 45 50 50 6 .20 20 40 90 50 60 Overall Score 41.23 37.54 54.77 46.46 56.15 Rankin 4 5 2 3 1