05chapter4-rev

05chapter4-rev - Facilities Location and Layout Agenda...

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Facilities Location and Layout
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Agenda Location/Allocation Techniques Introduction Important Factors in Location Decision Analytical Techniques Ford Median Method Weighted Factor Transportation Technique Hybrid Technique Q&A
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Location/ Allocation Techniques This session discusses the location and allocation tools and techniques for facilities A facility is something built or established to serve a purpose Location/ Allocation issues are typically part of the logistics and supply chain management field
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Introduction Logistics management problems can be classified into three categories: Location problems Allocation problems- distribution Location-allocation problems Single-facility or multi-facility Finite number of locations or infinite
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Introduction Location problems involve determining the location of one or more facilities in one or more potential sites- where Allocation problems assume that the number and location of facilities are known and attempt to determine how each customer is to be served Location-allocation problems involve determining not only how much each customer is to receive but also the number of facilities along with their locations and capacities
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Important Factors in Location Decision There are many objective, subjective and critical factors involved The relative importance of these factors depends on whether the scope of a particular location problem is international, national, statewide, or community wide We are dealing with selection of a site that optimizes a weighted set of objectives Some factors to consider:
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Proximity to source of raw materials Cost and availability of energy and utilities Cost, availability, skill, and productivity of labor Government regulations at the federal, state, county, and local levels Taxes at the federal, state, county, and local levels Insurance Construction costs and land price Government and political stability Exchange rate fluctuation Export and import regulations, duties, and tariffs Transportation system Technical expertise Environmental regulations at the federal, state, county, and local levels Support services Community services-schools, hospitals, recreation, and so on Weather depends on seasonality of product Proximity to customers Business climate Competition-related factors
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General Location Considerations First, the general area must be decided. Then, a site must be selected from among those available in the general area. And then, a facility location. It is important to remember, that best location can be very case specific.
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Analytical Techniques Usually, cost reduction is the point of emphasis when choosing a location Often, total distance traveled is targeted for the cost reduction Rectilinear distance is used when streets are laid out in grid form Euclidean is used when the distance traveled is in a straight line , like a highway
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