BALLOU13 - 13-1Facility Location DecisionsChapter...

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Unformatted text preview: 13-1Facility Location DecisionsChapter 13Experience teaches that men are so much governed by what they are accustomed to see and practice, that the simplest and most obvious improvements in the most ordinary occupations are adopted with hesitation, reluctance, and by slow graduations.Alexander Hamilton, 179113-2Facility Location in Location StrategyPLANNINGORGANIZINGCONTROLLINGTransport Strategy•Transport fundamentals• Transport decisionsCustomer service goals• The product• Logistics service• Ord . proc. & info. sys.Inventory Strategy• Forecasting• Inventory decisions• Purchasing and supply scheduling decisions• Storage fundamentals• Storage decisionsLocation Strategy•Location decisions•The network planning processPLANNINGORGANIZINGCONTROLLINGTransport Strategy•Transport fundamentals• Transport decisionsCustomer service goals• The product• Logistics service• Ord . proc. & info. sys.Inventory Strategy• Forecasting• Inventory decisions• Purchasing and supply scheduling decisions• Storage fundamentals• Storage decisionsLocation Strategy•Location decisions•The network planning process13-3Location OverviewWhat's located?•Sourcing points-Plants-Vendors-Ports•Intermediate points-Warehouses-Terminals-Public facilities (fire, police, and ambulance stations)-Service centers•Sink points-Retail outlets-Customers/Users13-4Location Overview(Cont’d)Key Questions•How many facilities should there be?•Where should they be located?•What size should they be?Why Location is Important•Gives structure to the network•Significantly affects inventory and transportation costs•Impacts on the level of customer service to be achieved13-5Methods of Solution•Single warehouse location–Graphic–Grid, or center-of-gravity, approach•Multiple warehouse location–Simulation–Optimization–HeuristicsLocation Overview(Cont’d)13-6Nature of Location AnalysisManufacturing (plants & warehouses)Decisions are driven by economics. Relevant costs such as transportation, inventory carrying, labor, and taxes are traded off against each other to find good locations.RetailDecisions are driven by revenue. Traffic flow and resulting revenue are primary location factors, cost is considered after revenue.ServiceDecisions are driven by service factors. Response time, accessibility, and availability are key dimensions for locating in the service industry.13-7Some Location Theory/PracticeEarly economic analysis•Bid rent curves•Weber’s isodapanes•Weber’s classification of industries•Hoover’s tapered transport rates•AgglomerationMathematical approaches•Light analysis-Chart, compass, ruler techniques-Spreadsheets-Checklists•Continuous location methods•Mathematical programming13-8Bid Rent Curve13-9CR (2004) Prentice Hall, Inc....
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This note was uploaded on 11/04/2010 for the course OPR 040 taught by Professor Ballau during the Spring '10 term at E. Kentucky.

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BALLOU13 - 13-1Facility Location DecisionsChapter...

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