Location Analysis

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The green points represent warehouses in various cities, and the polygons represent their market areas, which are divided into three rings. The surrounding green polygons can be reached by trucks within two hours; orange, within four hours; and red, within six hours.

See Also: Network Analysis and Location-allocation

Location analysis is a technique for discovering, assessing and specifying the optimal placement of an organization's people, information, activities, and materials. Location analysis can include developing models, techniques, and tools to help provide solutions to location based problems [1]. Location models are key in performing location analysis by providing a well-documented common vision of current and desired location arrangements. There are two common types of location analysis. The first is site selection where the procedure or model is aimed at selecting the most suitable location from within a set. The second is site search where the procedure or model is aimed at selecting a set of sites to be used for site selection [2].


Location analysis is an important issue in both the public and private sectors. In the private sector, small businesses need to know where to place facilities that will be successful in being accessible to a necessary portion of market-share to sustain their business. In the public sector, location analysis is important for public service departments facilities like fire stations, hospitals, and police stations. These examples can use a combination of service area and location analysis to determine the best places to place facilities in a way that they can be the most effective [3].

Location is often the most important factor in determining if a business will be successful or not. Facilities can reduce costs and keep their accessibility high by using location-allocation analysis. Private- and public-sector organizations can use location-allocation analysis to find the optimal site for a new facility that will service the demand points in the most efficient way possible. However, users should realize that the applications of location-allocation analysis varies depending on the project [4].Examples of private-sector organizations that can use location-allocation are restaurants and retail outlets. Examples of public-sector facilities are schools, hospitals, and fire stations [5].

When businesses use location analysis to determine the best sites for their facilities, success is not guaranteed. But strategically selecting a site from a location analysis should be better than other methods because the analysis works to identify the ideal location.

Euclidean Method

The euclidean method can be used to determine the distance between different stores. This map shows the distance between Save A Lot grocery stores, in Detroit, to other grocery stores in the city. It gives a distance radius around each Save A Lot grocery store. This helps aid in analysis of potential sites for new store locations.

Euclidean distance is the straight-line distance between points A to B on a plane or as the common phrase goes, “as the crow flies." Euclidean can be measured within different dimensions, one dimensional, two dimensional and three dimensional.

One dimension, the distance between two points on the real line is the absolute value of their numerical difference. Thus if x and y are two points on the real line, then the distance between them is given by [6]:

\sqrt{(x-y)^2} = |x-y|.

Network-Based Method

Closest Facility: Finding the hospital closest to an accident

With a network-based method, you can maintain network datasets that model transportation networks and perform route, closest facility, service area, origin-destination cost matrix, vehicle routing problem, and location-allocation network analyses on transportation networks [7]. For example, for police departments and hospitals you would want to know the quickest route to the accident or the closest facility from the crime scene.

Location Problems

There are four components that characterize location problems; these are (1) customers, who are presumed to be already located at points or on routes, (2) facilities that will be located, (3) a space in which customers and facilities are located, and (4) a metric that indicates distances or times between customers and facilities [8].




Further Reading

  • de Smith, Goodchild, Longley. Geospatial Analysis - A comprehensive guide(2013).


See Also