Lab 6 - Location-Allocation Modeling

This week's lab saw us using Network Analyst to perform a basic location-allocation analysis.  The goal was to show where change may be needed in a fictional company's distribution center service areas.  Since the distribution centers were built during the company's national growth, the areas being served may not actually be the best fit in terms of time and resources.  The service areas, or market areas, were reassessed using the location-allocation function.

Comparison of the market areas before and after completing the location-allocation analysis.

Technical Notes

The location-allocation analysis was run with the distribution centers as a required facility type.  This meant that the solver had to choose all 22 of the distribution centers when computing the final service areas.

The analysis also utilized advanced settings and set the analysis type to minimize impedance.  This meant that it solves what ESRI calls the 'warehouse location' problem - it minimized all of the total impedances set into an analysis.  Our impedances utilized a roads network, which allowed U-turns and had the origination of the routes be at the facility (as opposed to the demand points - a.k.a. customers). 

If you were wondering, an impedance is a cost built into the analysis - meaning something the algorithm has to factor in.  Since the location-allocation analysis is built into the Network Analyst extension, this means that the algorithm essentially calculates the best routes from a facility to a customer.  No impedance cut-off was set (which usually refers to a set mileage from a facility or a drive time), so theoretically a customer located hundreds of miles away from a distribution center could be included within the market area for that center... provided that no other facility was located closer.