The document discusses various factors to consider when making facility location decisions. It outlines the strategic importance of location decisions and how they can impact costs, revenues and competitive position. It also describes different location options and factors that influence the location decision process, including regional factors, site-related factors, and community considerations. Quantitative methods for evaluating location alternatives are also presented, including cost-volume analysis and the centroid method.

1. Facility Location By Dr. Debadyuti Das, Reader Faculty of Management Studies University of Delhi

7. Factors influencing Location Decision Regional Factors Site-related Factors Multiple Plant Strategies Community Considerations

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

18. Example 1: Solution

19. Example 1: Solution 800 700 600 500 400 300 200 100 0 Annual Output (000) $(000) 8 10 12 14 16 6 4 2 0 A B C B Superior C Superior A Superior D

21. Plant Location Methodology: Centroid Method Formulas Where: C x = X coordinate of centroid C y = Y coordinate of centroid d ix = X coordinate of the ith location d iy = Y coordinate of the ith location V i = volume of goods moved to or from ith location

23. Plant Location Methodology: Example of Centroid Method (Continued): Determining Existing Facility Coordinates To begin, you must identify the existing facilities on a two-dimensional plane or grid and determine their coordinates. You must also have the volume information on the business activity at the existing facilities. X Y A (100,200) D (250,580) Q (790,900) (0,0)

24. Plant Location Methodology: Example of Centroid Method (Continued): Determining the Coordinates of the New Facility You then compute the new coordinates using the formulas: You then take the coordinates and place them on the map: X Y A (100,200) D (250,580) Q (790,900) (0,0) Z New location of facility Z about (443,627)