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Location strategies

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The owners of Speedy Logistics, a company that provides overnight delivery of documents, are considering where to locate their new facility in the Midwest. They have narrowed their search down to two locations and have decided to use factor rating to make their decision. They have listed the factors they consider important and assigned a factor score to each location based on a 5-point scale. The information is shown here.

Factor Factor Weight Factor Score at Each Location
Location 1 Location 2
Proximity to airport 40 5 3
Proximity to road access 30 4 1
Proximity to labor source 10 3 5
Size of facility 20 2 4

Using the procedure for factor rating, decide on the better location.

Location 1 is the better location because it provides a higher factor rating score than location 2.

Location 2 is the better location because it provides a higher factor rating score than location 1.

Neither location is better as the factor rating scores are the same.

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Solution Summary

Solution selects the better location by using factor rating method.

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Let us find the weighted scores of all the locations.

Weighted score=summation of (weight of ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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