The document discusses facility location and the process of selecting the best geographic location. It outlines key objectives like reducing costs and coordinating with government policies. The main steps discussed are selecting between domestic or international locations, then choosing a region, locality, and exact site based on factors like resources, market access, transportation and climate. Location analysis techniques covered include location factor rating, center of gravity, load distance, break even analysis, and weighted factor rating. The overall goal is to identify the optimal location for operating facilities.
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2. Facility location is the process of
identifying the best geographic location
for a service or production facility
Selecting suitable location for economic
and effective operations.
FACILITY OR PLANT LOCATION
3. While starting a new factory.
During the expansion of the existing plant.
When the existing plant is to be re-located at
some other place, to remove the drawbacks
of the present location or to gain the benefits
of a still better location.
Expiry of lease and the non renewal.
Need for selecting a suitable site or
location
4. Reduce operating cost and capital investment
Effective plant layout
Coordinating with government policies
Employee Security, welfare and public needs
OBJECTIVES IN LOCATION DECISION
5. With in the country or outside
Selection of the region
Selection of locality or community
Selection of the exact site
STEPS IN LOCATION SELECTION
6. Domestic OR International
Which country?
And the decision is taken on the basis of
Political/legal concerns.
Export or import quotas
Currency exchange rate
Cultural issues
With in the country or outside
7. Availability of resources(raw materials ,HR)
and customers
Market facilities
Transportation and climate
Government incentives
Economic and environmental conditions
Selection of the region
8. Availability of work force
Complementary business in the area
Availability of safety needs and basic needs of
employees
Tax in the area
Effectiveness in the initial stages
Selection of locality or community
10. Heavy manufacturing facilities
Large, require space, expensive
Light industry facilities
Smaller , cleaner plants , less costly
Retail and service facilities
Smallest and least costly
TYPES OF FACILITIES
11. LOCAION FACTOR RATING
1. Develop a list of relevant factors.
2. Assign a weight to each factor reflecting its relative
importance to the firm.
3. Develop a rating scale for the factors.
4. Score each location on each factor based on the scale.
5. Multiply the scores by the weights for each factor and
total the weighted scores for each location.
6. Make a recommendation based on the maximum
point score, considering other factors.
LOCATION ANALYSIS TECHNIQUES
12. CENTER OF GRAVITY TECHNIQUE
Location at center of all geographical areas
or branches
Reduce cost during transportation
13. Load distance
Calculation of distance with load
Choosing the load with lowest distanced one
Distance must be minimum
14. BREAK EVEN ANALYSIS
Method of selection of point where total revenue
equal total cost
WEIGHTED FACTOR RATING
Merge quantitative and qualitative factors
Weightage given to the factors and best one is
being selected.