NAME: DHEERAJ AGRAWAL NAME: DEVANGI DHINGANI

DIV.: C DIV.: C

ROLL NO.: 11 ROLL NO.: 12

ENROLL NO.: 147110592023 ENROLL NO.: 147110592024

SUBJECT

PRODUCTION & OPERATION MANAGEMENT

PARUL INSTITUTE OF MANAGEMENT &

RESEARCH

A right location of business ensures success of the

organization in current global competitive environment so

every business firm are requires to choose a location which

can very suitable to business.

A right location provides adequate access to customers, skilled

labours, transportation, etc.

objective of an organization is to satisfy and delight customers

with its product and services.

Facility Location requires large investment that can not be

recovered in short time.

Facility Location decisions affect the competitive capacity of

the company.

The facility location decisions affect not only costs but the

company’s income:

Regarding costs, facility location affects a great variety of

them:

Land costs.

Labor costs.

Raw materials.

Transportation and distribution

An expanding market.

Change in other resources

Mergers and acquisitions.

The pressure of the competence.

Introduction of new products or services.

The exhaustion of raw materials in a certain area.

A contracting demand, or changes in the location of the

demand.

Obsolescence of a manufacturing facility due to the

appearance of new technologies.

I) Deciding On Domestic Or International Location.

II) Selection Of Region

III) Selection Of Locality

IV) Selection Of Exact Site

Factor Rating Method

Centre Of Gravity Technique

Break Even Analysis Method

Load Distance Technique

Critical ScoresSuccess (out of 100) Weighted ScoresFactor Weight France Denmark France Denmark

Labor availabilityand attitude .25 70 60 (.25)(70) = 17.5 (.25)(60) = 15.0

People-tocar ratio .05 50 60 (.05)(50) = 2.5 (.05)(60) = 3.0

Per capitaincome .10 85 80 (.10)(85) = 8.5 (.10)(80) = 8.0

Tax structure .39 75 70 (.39)(75) = 29.3 (.39)(70) = 27.3

Educationand health .21 60 70 (.21)(60) = 12.6 (.21)(70) = 14.7

Totals 1.00 70.4 68.0

Table 8.3

N/S

E/O

Origen arbitrario

30 60 90 120 150

30

60

90

120

150

1.000

1.0002.000

2.000

V

V d = C

i

iix

x

Cx , Cy = Gravity Center

dix , diy = coordinates de la ubicación i

Vi = Volume of goods moved from/to i

i

iiy

yV

V d = C

Tra

nsp

ort

co

st a

re r

ela

ted

to

vo

lum

e

Three locations:

Akron $30,000 $75 $180,000

Bowling Green $60,000 $45 $150,000

Chicago $110,000 $25 $160,000

Selling price = $120

Expected volume = 2,000 units

Fixed Variable TotalCity Cost Cost Cost

Total Cost = Fixed Cost + Variable Cost x Volume

–$180,000 –

–$160,000 –$150,000 –

–$130,000 –

–$110,000 –

––

$80,000 ––

$60,000 –––

$30,000 ––

$10,000 ––

An

nu

al co

st

| | | | | | |

0 500 1,000 1,500 2,000 2,500 3,000

Volume

Akron lowest cost

Bowling Green lowest cost

Chicago lowest cost

Proximity to Customers Business Climate Total Costs Infrastructure Quality of Labour Suppliers Other Facilities Political Risks Government Barriers Trading Blocks Environmental Regulation Host Community Competitive Advantage

Customer Proximity.

Suppliers.

Owner Preference.

Technology.

Near To Other Businesses.

Rent.

Security.

Customer Parking

Available/Nearby.

Availability Of Suitable

Vacant Premises.

Avaibility Of Infrastructure

Facility.

Transport Facility.

Low Cost Of Construction.

So for establishing of any service unit taking into

consideration of all the previous factors which can affecting

to the business unit & according to that select the location

which can satisfy our most of the needs to run a service unit.

So the business can achieve its objective & goal of

the company easily in a competitive market & able to stand

in market for a longer time period.