Tag: location selection

Video Tip: Where New Warehouses are Booming–Loop 303

The growing logistics activity comes as many retailers and manufacturers are looking to reconfigure their supply chains, both to get closer to the big U.S. consumer markets and to get around the bottlenecks at traditional freight hubs.

The drive along the 36-mile length of the Loop 303 freeway around Phoenix takes under an hour. The trip goes fast, but not quite as fast as the land along the 303 is being gobbled up by developers and filled with massive manufacturing and logistics facilities. “Developers from all parts of the country have been planting flags in that area. For the most part, that corridor is spoken for,” says one developer.

The rush of activity along the 303 was triggered by a number of factors, chief among them being the rising costs of development in California. Slowly, companies were starting to realize they could build a distribution center or manufacturing plant in the Phoenix area for much less than a facility would cost in the major cities in California. And, the ports of Long Beach and the border with Mexico were within a few hours’ drive by truck.

“The Southwest Valley of Phoenix has always been the industrial and manufacturing corridor,” said an industry VP. “You can get to the ports in six hours, drop your shipment and get back home, all within allowable times.”

This 5-minute Wall Street Journal video (Oct. 12, 2022) takes a close look at one 17-mile stretch of Arizona’s Loop 303 highway where dozens of warehouses are springing up. Importers say regions like this one in Arizona are a good alternative to expensive and heavily-congested hubs like California’s Inland Empire, where space is scarce and comes at premium prices. Click here to watch it.

Classroom discussion questions:

  1. What are the advantages and disadvantages of opening warehouses on Loop 303?
  2. Of the 7 factors that impact location decisions discussed on pages 338-340 (see Chapter 8) in your Heizer/Render/Munson text, which applies here?

OM in the News: Using the Factor Rating Method to Pick an Apartment in NYC

Terese Lawry and Jacob Falkovich in their new apartment

I have often told my students that the factor rating method (covered in both Chapters 2 and 8) is one of their most versatile OM tools. But it was still interesting to see The New York Times article (Jan. 6, 2020) how one young NYC couple, needing to find a new home in a rush, used the model to expedite their search. Here is their tale:

When Terese Lawry and Jacob Falkovich suddenly found out they had to move, Jacob suggested they turn to a time-honored method for making hard choices: factor rating. The couple identified 22 factors to consider in selecting an apartment and, after much discussion, assigned each one a different weight.

“Without weighting criteria, people just start being like, I refuse to live without a dishwasher.”  Falkovich said. Their model featured basics, like cost, as well as size and layout. Factors also included subletting and pet policies, lease duration, physical elements like windows, lighting, water pressure, outdoor space, A/C and whether the building had an elevator or a doorman or a gym. Sometimes they disagreed.  Falkovich didn’t mind walking up 3 flights of stairs, but Lawry pressed him.  They agreed to assign an elevator a weight of 4; the size of the apartment, by comparison, was weighted as a 10, while laundry was given a 1.

For location, they calculated the score based on the mean duration of 10 weekly work commutes. They also included neighborhood features like proximity to grocery stores and parks, as well as aesthetics. When they toured their current apartment, a 2-bedroom, 2-bathroom duplex in Brooklyn, that rents for $3,300 a month, it scored a 238 —” 2 deviations up” from the other listings, which ranged from 180 to 215.

It’s not the first time he has relied on factor rating, Falkovich confessed. He used the same method when he was single and trying to decide whether to continue dating Lawry or another woman he began seeing around the same time!

Classroom discussion questions:

  1. Name 3 other potential applications of the model in your personal life.
  2.  What are the strengths and weaknesses of the model?