Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

3.2 Location Selection and Location Configuration

Intended learning outcomes: Differentiate between location selection and location configuration. Explain location selection using qualitative methods and factor rating. Describe location selection and location configuration with linear programming.


Figure 3.2.0.1 shows the difference between location selection and location configuration.

Fig. 3.2.0.1        Location selection and location configuration.

Location selection is selection of new locations, also in the case of moving facilities from existing locations to new locations.

Location selection is a part of what is called “greenfield planning,” that is, planning with new locations and therefore the fewest possible given frame­work conditions. Location selec­tion involves investments in basic infras­tructures as well as the building of possible company partnerships (for example, joint ventures). Official regulations often play a large role here.

Location configuration is assignment of products to an existing location. The assignment is made for each new product, or service, and can be re­viewed periodically. A certain product or service can be assigned to several locations, not only in distribution but also in production.

Location configuration forms part of “brownfield” planning, i.e., planning with predefined locations and possibly other boundary conditions. Location configuration is associated with further investment, this time in personnel, machinery and the establishment of supplier relationships. Conditions imposed by government also play a large role here.
Thus, the starting points and the objectives of location selection and loca­tion configuration are not the same. As a consequence, the methods differ.

  • Location selection is often handled using catalogues of criteria, such as morphological schemes, followed by a mostly rather qualitative evaluation.
  • In location configuration, in addition, suitable methods of mathematical program­ming are used, such as linear and nonlinear programming or heuristic methods.

Course section 3.2: Subsections and their intended learning outcomes

  • 3.2 Location Selection and Location Configuration

    Intended learning outcomes: Differentiate between location selection and location configuration. Explain location selection using qualitative methods and factor rating. Describe location selection and location configuration with linear programming.

  • 3.2.1 Location Selection Using Qualitative Methods and Factor Rating

    Intended learning outcomes: Disclose a model for systematic reduction of possible locations / partners. Produce an overview on steps in location selection and evaluation of a concrete case, namely a joint venture partner in China. Present in detail factors for location selection used in this case. Explain the results of factor rating and the sensitivity analysis in this case.

  • 3.2.2 Location Selection and Location Configuration with Linear Programming

    Intended learning outcomes: Produce an overview on linear programming (LP). For the design option of “in part decentralized production for the global market”, explain the use of mixed-integer linear programming (MILP).



Course 3: Sections and their intended learning outcomes

  • Course 3 – Supply Chain Design: Location Planning and Sustainability

    Intended learning outcomes: Produce design options for global production, distribution, service, and transportation networks. Describe location selection / configuration for a production network using qualitative / quantitative methods. Explain the concept of sustainability with reference to the triple bottom line. Disclose economic opportunities for social and environmental commitment as well as energy management concepts.

  • 3.1 Design Options for Integrated Production, Distribution, Service, and Transportation Networks

    Intended learning outcomes: Explain design options for global production networks, distribution networks, service networks, and transportation networks. Describe the network structure for decentralized distribution, and design options for retail networks. Disclose the integration of the portfolios.

  • 3.2 Location Selection and Location Configuration

    Intended learning outcomes: Differentiate between location selection and location configuration. Explain location selection using qualitative methods and factor rating. Describe location selection and location configuration with linear programming.

  • 3.3 Sustainable Supply Chains

    Intended learning outcomes: Explain the changing concept of sustainability with reference to the triple bottom line. Disclose economic opportunities for social commitment and for environmental commitment. Describe energy management concepts and measures for improved environmental performance. Produce an overview on the measurement of the environmental performance. Present social and environmental dimensions in industrial practice.


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