Finding The Best Location For A Warehouse Assignment

Finding the Best Location for a Warehouse Assignment: Case Study - Video Presentation

As we saw in the previous activity, there are many factors that go into a location decision. However, once the general region has been selected based on the factors that influence facility location, then a more detailed study has to be conducted to select the best site. In this case study, the general region has been determined, and now it is your job to find the lowest cost location for your company.

Your boss has tasked you with recommending a location for a new warehouse in the country of Luxembourg. Your company is a wholesaler of fruit and needs to supply all the stores of a major food chain in Luxembourg. Currently, all shipments of fruit are dispatched from a warehouse in Germany and transported into Luxembourg via the A1 motorway. However, this route often experiences heavy traffic and delays. To improve customer service and reduce transportation costs and time, the CEO wants to identify the optimal location within Luxembourg for a new warehouse.

You are provided with a map of Luxembourg and daily shipment data from various towns, including quantities of apples, oranges, and bananas. Your goal is to determine the best location based on the center-of-gravity method, considering each town’s shipment volume and geographical position.

In conducting your analysis, you need to use the provided shipment data to compute a weighted centroid—an optimal point minimizing transportation costs—by taking into account the volume of shipments to each town and their coordinates on the map. For accuracy, if a coordinate lies exactly between two grid points, use the midpoint (e.g, 1.5 if between 1 and 2).

Specific Tasks:

• Analyze the shipment data to determine total shipments per town.
• Calculate the weighted average of the coordinates based on shipment volume for each town.
• Identify the optimal location coordinate (x, y) within Luxembourg for the new warehouse.
• Create a professional 2-3 minute video presentation using PowerPoint Studio outlining your process, methodology, and findings.

This project requires precise calculations and a clear explanation of your decision-making process to ensure that your recommendation is well-founded and professionally presented to the company's leadership.

Paper For Above instruction

The task of selecting an optimal location for a new warehouse in Luxembourg involves meticulous analysis of shipment data and geographic factors to minimize logistics costs and improve delivery times. The methodology employed in this scenario is the center-of-gravity model, a quantitative approach well-suited for location analysis in supply chain management. This model assigns weights—representing shipment volumes—to the geographic coordinates of towns, enabling the calculation of a centroid that minimizes the weighted distances between the warehouse and the delivery points. This approach assumes that transportation costs are directly proportional to distance, and thus, finding the weighted centroid reduces overall logistical expenses.

The first step involves analyzing the available shipment data from various towns, including quantities of different fruits transported daily, indicating the volume of demand or shipments originating from each location. These data points are crucial as they serve as weights in the center-of-gravity calculation, where towns with higher shipment volumes exert more influence on the optimal location. This weighting ensures that the warehouse is positioned closer to higher-volume delivery points, effectively reducing transportation time and cost.

Next, geographic coordinates for each town are derived from the provided map, often requiring careful approximation if the town's location falls between grid points. Precise calculation dictates that if a location is exactly between two coordinates, the midpoint should be used to reflect the most accurate position. Using these coordinates along with shipment volumes, the weighted average for longitude (x-coordinate) and latitude (y-coordinate) is computed through the formulas:

Xweighted = (Σ (Xi * Wi)) / Σ Wi
Yweighted = (Σ (Yi * Wi)) / Σ Wi

Where X_i and Y_i are the geographic coordinates of each town and W_i represents the total shipment volume for that town. This calculation provides a single point within Luxembourg that minimizes the total transportation cost based on shipment demands.

Upon performing these calculations with the provided shipment data and town coordinates, the resulting weighted centroid indicates the most strategic location for the new warehouse. The centroid's position is then visually represented on the map to aid decision-makers. Further considerations might include land availability, infrastructure, and future growth prospects; however, the weighted centroid offers a solid quantitative foundation for the initial site selection.

Finally, to communicate these findings professionally, a short video presentation is prepared using PowerPoint's Studio feature, highlighting the method, calculations, and final recommended location. This presentation not only demonstrates the analytical process but also ensures clarity for stakeholders and executives, facilitating an informed decision.

Conclusion

The center-of-gravity method provides an effective quantitative tool for selecting the optimal warehouse location in Luxembourg based on shipment data and geographic coordinates. By aligning logistical planning with real-world demand and distance considerations, this approach ensures efficiency and cost-effectiveness in supply chain operations. Properly executed, this analysis leads to smarter infrastructure investments and improved service levels, ultimately benefiting both the company and its customers.

References

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• Murphy, P. R., & Knemeyer, A. M. (2018). Contemporary logistics. Pearson.
• Miller, R., & Blair, P. (2010). Input-output analysis: Foundations and extensions. Cambridge University Press.
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