12. Explain the differences among factor rating, the load-distance model, and break-even analysis. What criteria does each method use to make the location decision?
Factor rating determines the weighted summed score for each location based on the rating of the ability of each location to meet the factor criteria. The load-distance model measures the frequency of movements over distance to determine which alternative minimizes travel costs. Break-even analysis determines the level of demand needed to cover all the costs. Factor rating can consider a variety of factors, while the load-distance model only considers travel costs. Break-even analysis only considers costs and demand.