Ashish Soni

EMBA
1st Semester
C-4/EMM/60
PRODUCTION AND OPERATIONS MANAGEMENT

A Case Study on the Facility Location Problem for a Large-Scale

Cosmetics Product Company

Abstract
Facility location models have been extensively studied and their practical use reported in supply chain related literature.
However, few studies exist that relate these models to Disaster Operations Management, where abundant application may be
found, for example the possibility of a large scale production that demands immediate action and requires service to a densely
populated area. This work takes a facility location model proposed in literature and presents a case study for its application to
DuPage County in Illinois. Prospective medical facilities are selected to service the needs of the various communities.
Meaningful results are obtained and discussion of future research possibilities.

1. Introduction

Large scale emergencies are an issue that all levels of the government are gravely concerned about. Since the 2001 terror
attacks in New York City, it has become imperative to pursue research into Disaster Operations Management where facility
location planning is crucial for the event of a large scale production. Large scale emergencies come in many forms such as
man-made disasters, acts of nature, or even during times of combat. Models that suggest facility location plans in the event of
emergencies must consider the facility location objective, facility quantity, and service quality. Facility location models have
been largely studied and their practical use reported in supply chain related literature [3] [4] [12]. However, very few articles
[11] are found reporting the application of these models to situations where medical services are required for emergencies that
affect most of the population. Specifically, in this article a case study is presented where it is assumed a terrorist attack occurs
over DuPage County in the State of Illinois. The P-center model is applied to determine how to allocate a given number of
emergency facilities to satisfactorily meet the population demands. In this work, the distance from major population centers
from various communities throughout DuPage County and the prospective production facility locations is calculated. Much
of this information is obtained from city officials and using commercially available mapping software. The information
collected is put into the facility location model and we then run our model using Lingo.

2. Large Scale Production Services

Facility location problems that deal with large scale production services are a special case since they involve low frequency
of attacks and substantial impact on the local communities. An appropriate model should be able to assign a limited number
of facilities to service all required demand points. Moreover, the distance between the demand point and the prospective
medical facility site should be kept to a minimum to ensure that the service is able to manage a large area. However, the
choice of model and the location assignments will remain ambiguous since a large-scale attack is bound to affect the
livelihood of thousands regardless of medical facilities available. Therefore, it is plausible to state that resources should be
pooled and distributed to address the needs of many in a large area. Some of the techniques used in LEMS stems from
Disaster Operations Management (DOM) and includes research on mathematical programming [1-2] [9] [13] [15] [17],
probability theory and statistics [6], simulation [5] [10] [14] [16], decision theory and multi-attribute utility theory [7-8].

2.1 Terrorist Attack

Unlike the anthrax scare of the early part of this decade, the smallpox virus is able to transmit from person to person rapidly.
In the event of a smallpox terror attack, civil service personnel (policemen, paramedics, firemen, etc.) will need to be
protected to ensure that they are able to assist civilians with greater ease and finesse. Medical equipment and supplies need to
be available to emergency responders at facilities that can quickly distribute the necessary materials. Furthermore, treatment
solutions need to be available on a mass scale to allow all affected persons to be treated and released in a timely manner.
Eventually, the facility will not only have to take into consideration distribution at the local level, but also determine how to
optimize logistics to receive assistance from the federal level. An excellent article that proposes facility location models for
several potential terrorist attacks is that of Jia, Ordóñez, and Dessouky [11].
 3. P-Center Model

3.1 Model Introduction

The P-center model’s goal is to minimize the worst performance of a system where the average system performance is not
considered a primary goal. More commonly, the P-center model is referred to as the minmax model since it tries to
minimize the maximum distance between a required demand point and a prospective site point [11]. One of the major
assumptions of this model is that it is assumed that a demand point is fully serviced and a limited number of facilities are
available.

3.2 Model Formulation

The proposed P-center model is found in [11] and is represented as follows:

Minimize L

s.t. ∑xJ ≤ P (1)

j∈J

∑zij pjk = Qi ∀i ∈ I (2)

j∈J
zij ≤ xj ∀i ∈ I,∀j ∈ J (3)

∑β ikeikMidijzij j∈J

L ≥∀i ∈ I,∀k ∈ K (4) Qi

xj ,zij = {0,1} ∀i ∈ I,∀j ∈ J (5)

The L represents the total weighted distance between the demand points and prospective facilities. This value is the model
objective and it is the intent of the P-center model to ensure that it is the smallest maximum distance required. The table
below outlines the respective values and their definitions:

Table 1: Variable Definitions

Value
Meaning
Ii ?
Demand Point (city)
Jj ?
Prospective Site Point (facility)
Kk ?
Scenario (Smallpox Attack)
xj
if a facility is placed at site j
zij
If a facility i services site j
Qi
Number of facilities required at demand point i
pjk
reduction in service capability of facility j under scenario k
?ik
likelihood for demand point i to have a large-scale emergency situation k
eik
impact coefficient for demand point i under large-scale emergency situation k
M
Population of demand point
dij
Distance between demand point i and prospective facility site j
 Site
Addison
Bloomingdale
Downers Grove
It is critical to note that x and z are both binary variables.
Lisle
Wheaton
4. Case Study Naperville
Bartlett
For this case study, it was considered the situation ofWest
a smallpox terrorist attack in DuPage County. The smallpox disease can
Chicago
be transmitted through person-to-person contact, and thus it can spread really faster than other disease (anthrax). First
Lombard
responders (e.g. fire, police, medical personnel, etc.) are the people
1 who need immediate vaccination once a smallpox
emergency is detected to remain effective during the emergency. 5.3 Therefore medical supplies need to be stored at local
facilities for instantaneous use by the first responders. Furthermore,
3.2 during smallpox emergency mass vaccination is often
necessary, which requires tremendous medical supplies; hence 11.5 the strategic national stockpiles (SNS) would be requested to
meet this massive demand. Jia, Ordóñez, and Dessouky [11] establish
12.6 an integer model based on the P-center model, well
known in facility location literature. They illustrate the use of6.9this model with an example using information from California.
17.2
11.1 County Map
Figure 1: DuPage
9.6
The following table represents the distance between village 6.2
hall of each community and the prospective site. The village hall
was used as the center for each 2 community since it allowed for
easily accessible information and serves 12.1 as the center for any community.
Each prospective site is a major hospital 17.7 facility that is equipped with an
Emergency Room capable of handling 6.1 above normal number of cases.
The numbers below are in miles and are 9 approximate.
16.3
Table 2: Distance Table from Demand 13.5 Point to Site Point
24.9
25.2
9.3
3
12.9
13.1
1.9
6.3
9
11.2
21.1
17.9
3.6
4
12.8
9.5
14.5
10
3.3
7.7
10.1
2.7
10
5
21.8
18.5
25.2
21.3
14.6
19.4
City/Town
Site14.3
Demand 9.3 Point (I)
Addison
Population
Bloomingdale
19.6 (M)
Smallpox Occurrence
Downers 6 Grove Likelihood (?)
LisleCoefficient
Impact 19.9 (e)
Wheaton
Weight (?eM)
20
Naperville
Required Facility Quantity (Q)
9.8
Bartlett
Addison
West5.8 Chicago
36378
8.7
Lombard
1 0.91
20.41
 Bloomingdale
7
21675
5
11.61
12.5 1
21.675
14.9
Given that this is an integer problem with binary variables,13.1 1 are certain complexity issues associated with the model,
there
which means that for large size problems the computerDownerseffort
19.8solve
to Grove
the model by means of an exact algorithm to optimality
will increase exponentially with the problem size. Therefore, the
49302
18.8 recommendation would be to use heuristics based methods
when facing large size problems. For the small case study 2 constructed
15.8 1 we used LINGO. The information of parameters for
our model is shown in the table 1 below. 8.8 1
49.302
8
Table 3: Model Input
28.52 Data Values
Lisle
28.7
23376
The values of β and e are arbitrary and assumed to be 19.6 1 for simplicity. The Required Facility Quantity column also
15.7 1
has arbitrary values assigned. These values can easily be adjusted once more reliable information is made available or
16.5 1
demanded. The total number of facilities available for use is four and this value is represented by P.
23.376
13.7
22.9 1
5. Results Wheaton
13.8
55416
21.5
Results indicated that sites 3, 4, 5, and 6 should be used3 to service the needs of all the communities listed. More specifically,
1
the table below gives a tabulation of what the results are to be9like:
13.21
55.416
19.5
Table 4: Demand Point and Site Point Facility Assignments
5.32x
Naperville
9.5
140106
Since the P-center model works as a minmax system, it is determined
15.5 x to find the minimum maximum distance that is to be
traveled between all demand points and the service facility 14.7 1
points
x (sites). In this case, it has determined that sites 3, 4, 5, and
26.7 1
6 should be utilized to satisfy the demand points. The weighted-distance is calculated as 924.7049 miles, which is an
approximate value since the exact total distance is notxconsidered.
140.106
26.5
10.4 3
x
6. Conclusions 4 Bartlett
x
37304
Since the catastrophic events of September 11, 2001, interest in1large scale production scenarios has increased and given new
life to a topic that is not visited often. A P-center model proposed 1 in literature [1] was easily applied to DuPage County and
its communities. The P-center model might not represent many 37.304other factors needed; however, it does suggest how county
2
officials could allocate their resources given a smallpox terror attack. The data used was selected in a manner that would
allow it to run on commercially available software suchWest Chicago
as LINGOx without too much time consumption. As more
communities are added to the P-center model; the elapsed time 26554
could
x increase drastically and become computationally more
expensive. DuPage County is adjacent to Cook County, the largest 1 county in Illinois, and any terror attack on DuPage
County would also adversely affect the residents and communities 1 close to the DuPage and Cook County border.
26.554
5 1
x
Lombard
42975
1
x 1
42.975
2
x

x
6

x
x

x
x

7
 8

If DuPage County was divided into a 5 mile by 5 mile grid, and each grid required having at least one prospective site, the
total number of prospective sites would easily exceed 100 sites. In this case, heuristics would be required to approach an
optimal solution without navigating prohibitive computing time. Future research will endeavor into linking multiple counties
suffering terror attacks and allocating resources between multiple counties.