for aiub summar , for semister break preparation

1. O P E R A T I O N S M A N A G E M E N T
L E C T U R E 6 A
Location Planning and Analysis

2. Need for Location Decisions
 Marketing Strategy
 Cost of Doing Business
 Growth
 Depletion of Resources

3. Need for Location Decisions
 Strategic Importance of location decisions
 Long term commitment/costs
 Impact on investments, revenues, and operations
 Supply chains

4. Need for Location Decisions
 Objectives of location decisions
 Profit potential
 No single location may be better than others
 Identify several locations from which to choose

5. Need for Location Decisions
 Location Options
 Expand existing facilities
 Add new facilities
 Move

6. Making Location Decisions
 Decide on the criteria
 Identify the important factors
 Develop location alternatives
 Evaluate the alternatives
 Identify general region
 Identify a small number of community alternatives
 Identify site alternatives
 Evaluate and make selection

7. Location Decision Factors
8-7
Regional Factors
Site-related
FactorsMultiple Plant
Strategies
Community
Considerations

8. a. Regional Factors
 Location of raw materials
 Location of markets
 Labor factors
 Climate and taxes

9. b. Community Considerations
 Quality of life
 Services
 Attitudes
 Taxes
 Environmental regulations
 Utilities
 Developer support

10. c. Site Related Factors
 Land
 Transportation
 Environmental
 Legal

11. d. Multiple Plant Strategies
 Product plant strategy
 Market area plant strategy
 Process plant strategy

12. Service and Retail Locations
 Manufacturers – cost focused
 Service and retail – revenue focused
 Traffic volume and convenience most important
 Demographics
 Age
 Income
 Education
 Location (Comparison among locations)
 Good transportation
 Customer safety

13. Comparison of
Service and Manufacturing Considerations
Manufacturing/Distribution Service/Retail
Cost Focus Revenue Focus
Transportation modes/costs Demographics: age, income, etc.
Energy availability, costs Population/drawing area
Labor cost/availability/skills Competition
Building/leasing costs Traffic volume/patterns
Customer access/parking

14. Thank you
THAT’S THE END OF
LECTURE 6A