Evaluation of Transport Costs for Alternative Factory Sites — A Case Study

Abstract

The problem of siting one or more factories so as to minimize transport costs is considered in the context of other factors of interest to management. The method of solution is described. This involved the solution of simple transportation problems, the determination of rules by which costs could be computed, the construction of an analogue machine to assist with the problem of site selection and the writing of a programme for a digital computer to cope with the heavy load of calculation. The way in which the work of the operational research team was organized to meet a deadline is described and a number of technical difficulties are discussed. The solution consisted of the presentation of minimum transport costs for each of a large number of possible combinations of factories so that management could assess the relative importance of transport costs together with other factors when deciding where to build factories for the manufacture of a new product.