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Facility Location Planning

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Facility Location Planning
Facility Location Planning
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Facility Location Planning

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What is facility location ?
Operations Strategies for Multiple Facilities
Factors affecting Facility Location Planning
Locating Foreign Operations Facilities

What is facility location ?
Operations Strategies for Multiple Facilities
Factors affecting Facility Location Planning
Locating Foreign Operations Facilities

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Facility Location Planning

  1. 1. Prepared By, Mr. Nishant Agrawal Facility Location Planning
  2. 2. Session Outline  What is facility location ?  Operations Strategies for Multiple Facilities  Factors affecting Facility Location Planning  Locating Foreign Operations Facilities
  3. 3. Facility location / location analysis / k-center problem  It is a branch of operations research and computational geometry concerned with the optimal placement of facilities to minimize transportation costs .  The facility location decision is very important for big business house  Wrong location of facility may lead to failure of the
  4. 4. Operations Strategies for Multiple Facilities Strategies Facilities Different Product / Service Different Geographical Area Different Process
  5. 5. Separate Facilities for Different Product / Service  Companies which are into diversified product / service ranges prefer to have separate facilities for each of these.  Each facility take care entire population. This is done to avoid confusion  Ex. ICICIC which is into banking , insurance , mutual funds has separate network of office for each of these segments. Separate Facilities to serve different geographical areas  Ex. Pepsi and Coca Cola offer a perfect example of this strategy. Both these companies have bottling plants scattered all over the country.  This strategy reduce overall transportation costs. Prompt actions can be taken to deal with sudden changes in demand.  Ex. Banks, courier services
  6. 6. Separate Facilities for Different Processes  Many color TV manufacturers have separate facilities for manufacturing pictures tubes.  Reliance which are into backward integration. Which manufacture their own raw materials
  7. 7. Factors affecting Facility Location Planning Facility Location Planning Availabilit y of power supply Governmen t Policy Environmen t and Community Easy availability of cheap land Low construction cost Availability of cheap labor Good Transport ation facilities
  8. 8. Locating Foreign Operations Facilities Facility Location Planning Trade Barriers Internationa l Customers Internationa l Competition s RegulationsLow Costs Incentives Good Transport ation facilities
  9. 9. Assignments Q.1) Explain the Factors affecting Facility Location Planning. OR What do you understand by facility Location? If you want to set up a Chemical manufacturing plant anywhere in Gujarat, what are the factors which you will consider to choose the location for your plant explain in detail? OR If you want to set up a Power Plant, what are the factors will you consider before selecting the location? OR Suppose you are working as a turnkey project consultant. One of your clients wants guidance in selecting facility location for his new fast-food restaurant. Guide your client. Q. 2) Discuss the pros and cons for a company considering a foreign location for its operations

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