Midwest Beer and Beverage Distributors

Midwest Beer and Beverage Distributors: Location Analysis
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Executive Summary
Location analysis refers to the technique that is used to discover, assess and specify the best possible placement of an organization’s materials, activities, information, and people. In this report, the location analysis technique of Weighted Centre-of-Gravity has been used in calculating the weighted average location of Midwest Beer’s new warehouse in the suburbs of Chicago. The calculations reveal that South Location has a lower weighted average location than West Location. Thus, it is recommended that Midwest Beer should locate the new warehouse in the Chicago suburbs in the South Location. The factors that should be taken into consideration for the expansion location in the next city include accessibility, competition, security, and skill base in the area. The four cities of Madison, Indianapolis, Milwaukee and St Louis can be compared based on the factors above to determine the next city for expanding into. The city that performs the best overall should be selected as the next city.
Table of Contents
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Executive Summary  PAGEREF _Toc523223891 \h
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Topic: Midwest Beer and Beverage Distributors: Location Analysis  PAGEREF _Toc523223892 \h
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1.0 Introduction  PAGEREF _Toc523223893 \h
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2.0 Analysis and recommendation of the new warehouse location in Chicago  PAGEREF _Toc523223894 \h
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2.1 Analysis  PAGEREF _Toc523223895 \h
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2.2 Recommendation  PAGEREF _Toc523223896 \h
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3.0 Preliminary review analyzing the factors for the expansion location  PAGEREF _Toc523223897 \h
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3.1 Accessibility  PAGEREF _Toc523223898 \h
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3.2 Competition  PAGEREF _Toc523223899 \h
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3.3 Security  PAGEREF _Toc523223900 \h
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3.4 Skill base in the area  PAGEREF _Toc523223901 \h
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4.0 Conclusion  PAGEREF _Toc523223902 \h
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5.0 References  PAGEREF _Toc523223903 \h
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Topic: Midwest Beer and Beverage Distributors: Location Analysis
Location analysis refers to the technique that is used to discover, assess and specify the best possible placement of an organization’s materials, activities, information, and people. In performing location analysis, location models are of great importance as they provide a well-documented common vision of the desired and the existing location arrangements (Powers, 2018). The Centre-of-Gravity is a quantitative model that centrally locates a proposed facility amongst the current facilities. The purpose of this report is to provide location analysis and recommendation of the new warehouse for Midwest Beer in the suburbs of Chicago. Based on several stores locations, the Weighted Centre-of-Gravity technique is used in calculating the weighted average location of the company’s new warehouse. The new location of the warehouse is compared to the company’s present location. Also, the report provides a preliminary review analyzing the factors for the expansion location.
2.0 Analysis and recommendation of the new warehouse location in Chicago
2.1 Analysis
In this section, the location of the new warehouse in the suburbs of Chicago is analyzed, and an appropriate recommendation is given. The location coordinates are based upon (0,0) point which is specified at Chicago’s O’Hare Airport. The warehouse location data is as follows:
Table 1: Warehouse location data
StoreSouth Location (miles)West Location (miles)Monthly Volume (100-cases)123555021537120381010412405510606 (proposed)-102065
Costs of transportation are generally a function of time, weight, and distance. The Weighted Centre-of-Gravity method refers to a quantitative technique that is used to locate a certain facility, for instance, a warehouse, at the center of movement within a geographic locale basing upon distance and weight. Using the center-of-gravity technique, one can identify a set of coordinates that designate a central location on a map of the other sites (Santos-Peсate, 2016). In computing the weighted average for every site, the monthly volume is multiplied by the distance in miles. This is shown below:
For South Location
Store 1: (23)(50) = 1150
Store 2: (15)(120) = 1800
Store 3: (8)(10) = 80
Store 4: (1)(40) = 40
Store 5: (5)(60) = 300
Store 6: (-10)(65) = -650
For West Location
Store 1: (55)(50) = 2750
Stor...