POM#3- Facility Location Planning - Facility Location Planning Akhilesh Tiwari Objectives Why is it important to plan facility location What are the

POM#3- Facility Location Planning - Facility Location...

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Facility Location Planning Akhilesh Tiwari
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Objectives Why is it important to plan facility location? What are the operations strategies for having multiple facilities? What factors to consider in facility location planning? Factor and Location Ratings Breakeven analysis for Facility Location Planning Simple Median model for location selection Centre of Gravity Method Transportation Model for Location Planning Ardalan Heuristic for Location Planning of Service Facilities Akhilesh Tiwari
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What is Facility Location Planning? Facility location planning is the process of identifying the best geographic location for a service or production facility Infrequent decision based on: Demand outgrowing existing capacity. Local changes in labor productivity, exchange rates, costs, local attitudes. Shifts in demographics and customer demands. Location options: Don’t move, expand an existing facility. Maintain current sites, add another facility. Close an existing facility and move to another location. Akhilesh Tiwari
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What if we do not plan? Finding Buyers for a wrong Place Sell at a loss Investment stuck up for extended duration Disinvestment/Liquidate Only machines and equipment What about Human Resources Fresh investment Setting up, training, recruiting costs Relocate Low profit/less market share Competitors at better locations Ultimately have to move to better location in long run Continue Operating Akhilesh Tiwari
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Strategies for Multiple Locations Each Facility to take care of entire market for a particular service Economies of Scale Consumer Durable Industry ICICI Bank has different branches for different services Separate Facilities for different Services Pepsi and Coca-Cola Different bottling plants cater to different geographic areas Reduction in Transportation costs and lead time Flexibility for sudden changes in demand Also used by banks, courier services Separate Facilities for different Geographical Areas Divide process into components at different locations Consumer durables, Fertilizers, Banks etc Separate Facilities for Different Processes Akhilesh Tiwari
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Factors Affecting Location Planning Self Reading Akhilesh Tiwari
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Steps in Facility Location Planning Akhilesh Tiwari
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Screening using Factor and Location Ratings Akhilesh Tiwari
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  • Fall '16
  • Akhilesh Tiwari

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