|Location Decisions||Closely tied to an organization's strategies.|
|Location Choices||Impact capacity and flexibility|
|Location Decision Factors|| 1) long-term commitment - makes mistakes difficult to overcome.|
2) poor choice - excessive transportation, shortage of qualified labor, loss of competitive advantage, inadequate supplies of raw material.
3) For services, poor location result in lack of customers and/or high operating costs.
|Location Options|| 1) Expand exisiting facility|
2) add new locations whiile retaining exsisting ones
3) Shut down at one location and move to another.
4) Do nothing
|Global Location Facilitating Factors|| 1) Trade agreements|
|Global Location Benefits|| 1) Markets |
2) Cost savings
3) Legal and regulatory
|Global Location Disadvantages|| 1) Transportation Cost |
2) Security Cost
3) Unskilled Labor
4) Import Restrictions
|Global Location Risks|| 1) Political |
|General Procedure For Making Location Decisions||1) Decide on the criteria to use for evaluating location alternatives, such as incresed revenues or community service|
2) Identify important factos, such as location of markets or raw materials
3) Develop location alternatives
a) Identify a country or countries for location
b) Identify the general region for a location
c) Identify a small number of community alternatives
d) Identify site alternatives among the community alternatives
4) Evaluate the alternatives and make a selection
|Identifying a Country|| see page 378 table 8.1|
Government, Cultural differences, Customer preferences, labor, resources, financial, technological, market, safety.
|Identify a Region|| 1) Location of Raw Materials |
2) Location of Markets
a) Geographic information system (GIS) - A computer based tool for collecting, storing, retrieving, and displaying demographic data on maps.
3) Labor Factors
4) Other factors - Climate and taxes
|Microfactory||Small factory witha narrow product focus, located near major markets.|
|Locational cost-profit-volume analysis|| 1) Determine the fixed and variable cost associated with each location alternative.|
2) Plot the total-cost line for all locations alternatives on the same graph
3) Determine which location will have the lowest total cost for the expected level of output.
|Locational cost-profit-volume-analysis||Technique for evaluating location choices in economic terms.|
|Total Cost =||FC + v x Q|
|Factor Rating||General approach to evaluating locations that includes quantitative and qualitative inputs.|
|Center of gravity method||Method for locating a distribution center that minimizes distribution cost.|