Exercise 7: Creating territories using optimal locations

Creating territories from optimal locations can be used to build territories around optimally placed virtual centers in markets where you have little knowledge or where you don't currently have locations. Territory Design analyzes a base set of geographic elements, such as ZIP Codes, and place virtual territory centers at the most optimal sites. Territories grow from these sites to fill the specified area.

As we continue through the tutorial, the Metro Landscape business has grown and looking to expand and open new franchises in Iowa. You need to determine how many franchises to add. You can use Territory Design to locate starting points and build territories based on selected parameters. To get started, you will create a study area for the state of Iowa.

Steps:

1. From the Business Analyst Toolbar, click Study Area.
2. In the Study Area Wizard dialog box below, click the Create New Study Area button and click Next.
3. In the Study Area Wizard dialog box below, click By State in the drop-down menu. Be sure the From a list button is checked.
4. Click Next.
5. In the Study Area Wizard dialog box below, highlight Iowa in the Which States do you want to include in your study area? drop-down list and click the single right arrow to move it to the column on the right.
6. Click Next.
7. In the Study Area Wizard dialog box below, type Iowa Study Area in the What do you want to name the new Study Area? text box.

   This name appears in the reports and allows you to locate the study area for future use.

8. Click Finish.

   The state of Iowa appears on the map.

Next you will create territories for the state of Iowa study area.
9. From the Territory Design Toolbar, click Create Territory Solution.
10. In the Create New Territory Solution dialog box below, click the Create territories from optimal locations button and click Next.
11. In the Create New Territory Solution dialog box below, type Iowa Optimal in the Name your Territory Solution text box.
12. In the Alignment Layer drop-down menu, click ZIP Codes, in the Display field drop-down menu click NAME and click Next.
13. In the Create New Territory Solution dialog box below, click the Use spatial locations only button and click Next.

    Use spatial locations only locates territory centers by finding the height concentrations, or clusters, of the alignment layer polygons.

14. In the Create New Territory Solution dialog box below, leave the Assign default names button checked and click Next.
15. In the Create New Territory Solution dialog box below, click the Automatically set the number of territories button and click Optimal by Capacity in the drop-down menu.
16. In the Measure type drop-down menu, click Straight line distance and click Next.
17. In the Create New Territory Solution dialog box below, click the Constrain by an overall extent. The Constrain by attribute capacity check box is checked by default. Check the Edit button that corresponds with Constrain by attribute capacity.
18. The Capacity Options dialog box appears.
19. Click the plus sign to open BA Fields and select 2010 Total Population.
20. Click the single right arrow to move it to Capacity variable(s) as shown in the image below.
21. Click Next.
22. In the Capacity Options dialog box below, double-click the Capacity field that corresponds with 2010 Total Population and type 150000 in the text box and click Next.

    This sets the upper total population capacity for each territory at 150,000.
23. In the Capacity Options dialog box below, click Finish.
24. In the Create New Territory Solution dialog box below, click the Constrain by attribute capacity check box. Click the Edit button.
25. Create New Territory Solution dialog box below, click the Business Analyst Study Area button and click Iowa Study Area from the drop-down menu.

    This relates to the Iowa study area that you created earlier in this exercise. By selecting Iowa Study Area in the drop-down menu, the territories only draw within the selected geography area.
26. Click Next.
27. In the Territory Design Extent dialog box below, click the Polygon centroid contained within Extent button and click Finish.
28. In the Create New Territory Solution dialog box, leave the defaults checked and click Next.
29. In the Create New Territory Solution dialog box, click Next.
30. In the Create New Territory Solution dialog box, confirm that BA Fields 2010 Total Population is in the Selected variable(s) section on the right and click Next.
31. In the Create New Territory Solution dialog box, confirm the settings and click Finish.

    The map appears showing the territories drawn within the state of Iowa.

As shown in the graph below, the territories are unbalanced.

Click Improving territories to go to the next exercise to balance the territories.