Chapter 7 "Facility decisions: Location and capacity", after studying this chapter you will be able to: Present a framework for evaluating alternative site locations; identify the various factors, both quantitative and qualitative, that should be taken into consideration when selecting a location for a manufacturing or service organization; distinguish between those factors that are important for locating a manufacturing facility and those that are important for locating a service operation;. | F O U R T H E D I T I O N Facility Decisions: Location and Capacity © The McGraw-Hill Companies, Inc., 2003 chapter 7 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook Chapter Objectives Present a framework for evaluating alternative site locations. Identify the various factors, both quantitative and qualitative, that should be taken into consideration when selecting a location for a manufacturing or service organization. Distinguish between those factors that are important for locating a manufacturing facility and those that are important for locating a service operation. Introduce the concept of geographic information systems (GIS) as a tools for evaluating locations. © The McGraw-Hill Companies, Inc., 2003 7– Managerial Issues Deciding how large, when, where and what processes to include in the construction of a facility. Understanding the different risks associated with back-of-the-house and front-of-the-house investments as they relate to customer demographics and characteristics of a given location for product manufacturing and service producing firms. Factoring the complications of globalization into location decision. © The McGraw-Hill Companies, Inc., 2003 7– Locating Manufacturing Facilities Products that decrease in weight and volume during manufacturing tend to be located near the sources of raw materials. Products that increase in weight and volume during manufacturing tend to be located near the consumers. One site cost disadvantage such as transportation may be offset by a cost savings advantage specific to the site such as low labor costs. A location analysis should consider both qualitative and quantitative factors © The McGraw-Hill Companies, Inc., 2003 7– Qualitative Location Factors Local Infrastructure Institutional (., reliable electrical power grid) Transportational (., railway systems) Worker Education and Skills Education and skills of local workers. Product Content Requirements The minimum percentage of product | F O U R T H E D I T I O N Facility Decisions: Location and Capacity © The McGraw-Hill Companies, Inc., 2003 chapter 7 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook Chapter Objectives Present a framework for evaluating alternative site locations. Identify the various factors, both quantitative and qualitative, that should be taken into consideration when selecting a location for a manufacturing or service organization. Distinguish between those factors that are important for locating a manufacturing facility and those that are important for locating a service operation. Introduce the concept of geographic information systems (GIS) as a tools for evaluating locations. © The McGraw-Hill Companies, Inc., 2003 7– Managerial Issues Deciding how large, when, where and what processes to include in the construction of a facility. Understanding the different risks associated with back-of-the-house and front-of-the-house investments as they relate to customer demographics and
