Mulder chapter 2.pptx - Warehouse and Distribution Centre...

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Warehouse and Distribution Centre as Holistic Systems Mulder and Kobussen Chapter 2
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2.1 Choosing a Location The location of the WH is an important part of logistics Decisions related to the location and number of WH have greater importance because although the capacity of the WH can be changed later, changing the location of the WH requires substantial capital investment. Therefore the future of the supply network will be dictated by the static nature of decisions. Considerations in choosing a location include; - Development situation - Flexibility - Land price
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2.1.1 Development Situation Top Ten factors in location decisions 1. Reasonable cost for property 2. Roadway access for trucks 3. Nearness to customers 4. Cost of Labour 5. Low taxes 6. Tax exemptions 7. Tax credits 8. Low union profile 9. Ample room for expansion 10. Favorable attitude of community/residents to industry. For example: Located at ports, to lower-cost, focus on less-skilled manufacturing around the world.
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2.1.2 Flexibility Is an essential factor! Third party logistic providers require flexible solutions to be able reuse for other companies. It is important that changes in product characteristics and order profile can be absorbed in to a certain level within the design.
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2.1.3 Land Price Land prices are influenced by various factors, not just location. The eagerness of cities to attract business by subsidising land costs in one factor that influences land prices. Land availability in particular industrial land availability is an important factor and varies. Where available land is becoming rare, prices obviously go up! The population density and size of a country will additionally increase land prices. Environmental legislation is an issue that influences the availability of land. For example; a dense population, extended agriculture, water/air/land population, in addition to the growing awareness of damages to our environment have lead to stricter legislation in Western Europe.
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2.1.3 Land Price Geographical location is an important driver for the difference in building costs. For example there are high construction costs in Nordic countries, due to the relatively high cost of living, as a result of the large need to import more, than average. The level of building legislation and procurement arrangements are another driver accounting for differences in building costs.
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2.2 Enough Capacity Building costs of logistics distribution centre location are influenced by factors of nature environment. Factors that influence include; geological condition, climate and hydrological conditions. ( These factors should be taken into account, for example avoiding poor geological condition of the coast ).
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