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Location Planning and Analysis Strategies

This document discusses location planning and analysis. It outlines several key objectives of location decisions including long-term commitment, impact on costs and revenues, and competitive advantage. Several factors that affect location decisions are also examined, including regional factors like raw materials, markets, and labor, as well as community and site-related considerations. The document also covers microfactory strategies, service and retail locations, global locations, risks of global locations, and methods for evaluating location alternatives like cost-profit-volume analysis and transportation modeling.

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Ria Bryle
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135 views14 pages

Location Planning and Analysis Strategies

This document discusses location planning and analysis. It outlines several key objectives of location decisions including long-term commitment, impact on costs and revenues, and competitive advantage. Several factors that affect location decisions are also examined, including regional factors like raw materials, markets, and labor, as well as community and site-related considerations. The document also covers microfactory strategies, service and retail locations, global locations, risks of global locations, and methods for evaluating location alternatives like cost-profit-volume analysis and transportation modeling.

Uploaded by

Ria Bryle
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.

TOPIC VIII

LOCATION PLANNING
AND ANALYSIS

By: Prof. Marissa Lanuza


Objectives of Location Decisions:

• It entails a long-term commitment


• Location decisions often have an impact on investment re
quirements, operating costs and revenues and operations
• It can have a significant impact on competitive advantage
• It is important to supply chains
Factors that affect location decisions

1. Regional Factors

–Location of raw materials


–Location of markets
–Labor Factors

o Geographic Information System (GIS)


–A computer-based tool for collecting, storing, retrieving, and displaying demogra
phic data on maps.
Factors that affect location decisions

2. Community Considerations

 Quality of Life
 Services
 Attitudes
 Taxes
 Environmental Regulations
 Utilities
 Development Support
Factors that affect location decisions

3. Site – Related Factors

 Land
 Transportation
 Environmental/Legal (Zoning restrictions)
MICROFACTORY

– Small factory with a narrow product focus, located near major markets,
Multiple Plant Manufacturing Strategies

 Assign different product lines to different plants

 Assign different market areas to different plants

 Assign different processes to different plants


SERVICE AND RETAIL LOCATIONS

o Nearness to raw materials is usually not a factor


o Costumer access is a prime consideration
o Traffic volume and convenience are important factors as well
as good transportation and parking facilities
o Customer safety and security and competitors’ locations can b
e of significance
Global Locations
GLOBAL LOCATIONS
– Companies are finding strategic and tactical reasons to globalize their operations.

TWO KEY FACTORS:


1. Trade Agreements
– ASEAN, NAFTA

2. Technology
– Technological advances in communication and information
Global Locations
ADVANTAGES OF GLOBAL LOCATIONS:
– Markets
– Cost-Savings
– Legal and Regulatory
– Financial

DISADVANTAGES OF GLOBAL LOCATIONS:


– Transportation Costs
– Security Costs
– Unskilled Labor
– Import Restrictions
– Criticisms
Global Locations

RISKS:
– Political
– Terrorism
– Economic
– Legal
– Cultural
Evaluating Location Alternatives

1.) Locational Cost – Profit – Volume Analysis


• Technique for evaluating location choices in economic term

2.) Transportation Model


• Based on the movement of either raw materials or finished g
oods
• A separate analysis of transportation is needed when a probl
em involves shipment of goods from multiple sending points
to multiple receiving points and a new location (sending or re
ceiving points) is to be added to the system.
Evaluating Location Alternatives

3.) Factor Rating


• Used for location analysis
• It is an approach to evaluating locations that includes qu
antitative and qualitative inputs.

4.) Center of Gravity Method


• Method for locating a distribution center that minimizes di
stribution costs.
THANKS!

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