Location Planning Show
Several factors that influence location positioning include the location of raw materials, proximity to the market, climate, and culture. Models for evaluating whether a location is best for an organization consist of cost-profit analysis for locations, the center of gravity model, the transportation model, and factor rating. This chapter discusses the decision to relocate a facility by considering costs and benefits. If you are planning on moving or acquiring a new facility, there are many factors to consider: the size, the geographic area, culture, transportation costs and others. After a location or locations have been chosen a cost-profit-volume analysis is done. The main factors that affect location decisions include regional factors, community considerations, and site-related factors. Community factors consist of quality of life, services, attitudes, taxes, environmental regulations, utilities, and development support. EVALUATING LOCATION ALTERNATIVES (Page 385)
where FC=Fixed Cost, v=Variable Cost per Unit, Q=Number of Units (Also shown below but not in the same format)
Company Relocating IDENTIFYING A COUNTRY, REGION, COMMUNITY, AND SITE (Page 376) v IDENTIFYING A
COUNTRY v IDENTIFYING A REGION- 4 major considerations v IDENTIFYING A COMMUNITY v IDENTIFYING A SITE Note:
The above part is way too lengthy for this assignment. Summary : There are several ways that are very helpful in evaluating location alternatives, such as locational cost-profit-volume analysis, factor rating, and the center of gravity method. First, let’s take a look at Location Cost-Profit-Volume Analysis. This analysis can be done numerically or graphically. The procedure for locational cost-profit-volume analysis involves these steps: 1. Determine the fixed and variable costs associated with each location alternative. This method assumes the following: Here’re a couple of important formulas to remember: Total cost = Fixed cost + Variable cost per unit * Quantity or volume of outputTotal profit = Quantity(Revenue per unit – Variable cost per unit) – Fixed costIn most situations, other factors besides cost must also be considered. We will now consider another kind of cost often considered in location decisions: transportation costs. Transportation costs sometimes play an important role in location decisions. The company can include the transportation costs in a locational cost-volume analysis by incorporating the transportation cost per unit being shipped into the variable cost per unit if a facility will be the sole source or destination of shipments. When there is a problem with shipment of goods from multiple sending points to multiple receiving points, and a new location is to be added to the system, the company should undertake a separate analysis of transportation. In this case, transportation model of linear programming is very helpful. The model is used to analyze each of the configurations considered, and it reveals the minumum costs each would provide. Then the information can be included in the evaluation of location alternatives. Multiple Plant Manufacturing Strategies (page
381-382)
2. Market Area Plant Strategy
3. Process Plant Strategy
4. General-Purpose Plant Strategy Plants are flexible and have the ability to handle a range of products
. Question 2: Question 3: Question 4: Question 5: 1.) Location analysis assumes that both qualitative and quantitative factors are important in determining an ideal location when
using: 2.) The transportation model can be applied to solve factors including: 3.) The Transportation Model uses the following information to determine costs: 4.) Which is a TRUE assumption needed to perform Cost-Profit Volume Analysis? 5.) In the Factor Rating Method of location analysis, which of the following
is NOT a managerial choice? Question 5 needs an answer, also needs page numbers where answers are found 1) What does GIS stand for? 2)The primary consideration for identifying a site is? 3) What are the common techniques used to evaluate location alternatives? 4) What is a general-purpose plant strategy? 5) Method for locating a distribution center that minimizes the
distribution costs. 1) What is a primary factor in the regional level of location decisions? 2) In a geographic information system
(GIS), which is NOT involved in the data? 3) What is a disadvantage of globalization? 4) Mining operations, farming, forestry, and fishing are all examples of which primary reason for firms locating near or at the source of raw materials? 5) Which of the following would you establish a composite value for? 1. Which of these is a computer-based tool for collecting, storing, retrieving, and displaying demographic data on maps? 2. Which is a major consideration when choosing to operate in a region? 3. Considering global expansion, decision makers need to be absolutely clear on the benefits and risks and the likelihood of their occurrences when
deciding upon identifying: 4. A dominant factor that influences the location decision of a manufacturing firm is: 5. Which of the following is Not a primary consideration when identifying a site for operations? 1 . When using the Center of Gravity Method, what are the two differing variables for equal and unequal quantities shipped, respectively? 2. Which location alternative technique involves viewing the problem in economic terms? 3. When
considering foreign locations, crime, and the threat of terrorism fall under which category? 4. When using the factor rating method of location alternative evaluation, which of the following could be considered relevant factors? 5. Which of the following is
not a step in the general procedure for making location decisions? Chapter 8 Summary: The location of a business is crucial to it’s growth. There are many factors that come into play when choosing a suitable location. Usually it is one or a few factors that dominate the decision making process. For example, a change in market supply and/or demand, perhaps even if inputs used by the business have run out. A business can suffer greatly if the right location is not chosen. Therefore a business should evaluate all their options very carefully before making a final conclusion. There are generally four options a manager has with regard to location planning. The first option would be to take the current facility and make it bigger. The second would be to keep the current facility and just create a (or many) new one(s). The third would be to close down the current facility entirely and build a new one. The last option would be to keep things the way they are. Questions: Questions need to be multiple choice format. 1. What is the name of the computer-based tool used for collecting, storing, retrieving, and displaying demographic data on maps? 2. True or False: Most organizations try to find the one best location. 3. What are the three primary regional factors involved in location decision making? 4. Name three trade agreements mentioned in this chapter. 5. What are five disadvantages to having global operations? 6. Suppose that the operating costs of a company has a weight of .20. There are three possible location choices. The first location has a score of 60/100. The second location has a score of 50/100. The third location has a score of 80/100. What are the weighted scores of each location possibility? 7. What are some benefits associated with a company moving it’s operation’s globally? 8. What is the center of gravity method used for? 9. Find the center of gravity with the information provided below.
10. Determine the center of gravity based on the following information:
11. Use the table below and the cost-profit-volume analysis to determine the B Superior range approximation.
12. Use the table from Question 12 and the cost-profit-volume analysis to find the C Superior range approximation. Use the following information to answer question 1-3. 1. What is their total costs for the month? a. $2300 2. What is the firm’s total revenue for the month? a. $20000 3. What is the firm’s profit for the month ? a. $20000 4. If two alternatives yield comparable annual costs, management would be indifferent in choosing between the two in terms of _. a. total revenue 5. The transportation cost must be converted into cost per unit of in order to correspond to other variable costs if raw materials are involved. a. input 6. Which of the following is NOT a governmental factor when locating in a foreign region? Unit 7 Discussion#1 Choose a business that you would be interested in opening in your community. How would you decide where to locate that business? What would you be most concerned about in making this choice? Which of the following reasons encourages companies to make a product rather than buy it quizlet?Companies make products rather than buy them in order to reduce total costs.
Is a production technique in which inventory is kept to a minimum and inputs to the production process arrive exactly when they are needed?Just-in-time also known as JIT is an inventory management method whereby labour, material and goods (to be used in manufacturing) are re-filled or scheduled to arrive exactly when needed in the manufacturing process.
Is the process of staffing a company and ensuring that employees are as productive as possible?The process of staffing a company and ensuring employees are as productive as possible is called human resource management.
What is outsourcing quizlet?Outsourcing. Hiring another organization to perform service to save costs, gain expertise, free up management time, & refocus on core competencies.
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