This document discusses facility location and the factors to consider when selecting a location for a new facility. It outlines the objectives of location decisions like reducing costs and coordinating with government policies. Key steps in the location selection process include determining if the location will be domestic or international, selecting a country, and evaluating political, export/import, currency, and cultural considerations. Additional factors that are assessed include availability of resources, markets, transportation infrastructure, climate, incentives, and economic and environmental conditions. The document also describes techniques for location analysis, including factor rating, center of gravity, load distance, and break-even analysis.

1. FACILITY LOCATION
By Rajeev Ranjan

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.
When required facility 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. Within 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
Selection of locality or community

9.  Waste disposal
 Soil and topology
Selection of the exact site

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

15. THANK YOU…