11 Location Planning & Analysis

11 Location - Lesson 11 Location Planning Analysis involves the need for location decisions factors that affect them and guidelines for evaluating

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11 - 1 involves the need for location decisions, factors that affect them, and guidelines for evaluating location alternatives Lesson 11 Location Planning & Analysis
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11 - 2 Many factors affect location decisions . Marketing strategy (e.g. need to expand into other markets) . Growth . Depletion of demand (e.g. lack of customers) . Cost of doing business (e.g. customer requirements) . Competitive advantage . Lower operating costs . New products/services Need For Location Decisions
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11 - 3 Importance . Long term commitment - mistakes can be costly . Investment requirements . Costs . Proximity to customer Objectives . Profit potential Options . Expand existing facility . New facility in another location . Move to another existing facility . Do nothing The Nature of Location Decisions
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11 - 4 The general procedure for making location decisions involves . Establishing criteria for evaluating alternatives . Identifying important factors . Developing location alternatives . Identify general region . Identify community alternatives . Identify site alternatives among community choices . Evaluating alternatives and making selection Procedure For Location Decisions
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11 - 5 Proximity to suppliers Proximity to markets Speed (time based competition) Customers Perishable Markets Transportation costs Labor Factors Availability of work force Wages for the area and worker compensation laws Worker attitudes toward unions Quality of workforce (skills) Other Factors Taxes Production costs (e.g. Clothing, electronics) Climate Foreign location Sentiment (e.g. Buying Japanese cars made in USA) Currency Fluctuations Location Considerations
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11 - 6 Quality of life ( e.g. schools, entertainment, religion, shopping, etc.) Environmental regulations Services (e.g. Medical, fire, police) Utilities availability and cost Development support (e.g. bonds, tax abatement, low- cost loans) Infrastructure Land availability and costs Community & Site Considerations
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11 - 7 Product plant strategy - assign different products to different plants which can generate higher volume and result in cost savings Market area plant strategy - plants are designed to service geographic needs (e.g. west coast, southeast) and may have higher costs than in a “product strategy” Process plant strategy - different plants concentrate on different aspects of a process (e.g. one automotive plants concentrate on engines while another concentrates on brakes) Multiple Plant Manufacturing Strategies
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This note was uploaded on 09/10/2011 for the course ECON 101 taught by Professor Halcrow,b during the Spring '08 term at Antelope Valley College.

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11 Location - Lesson 11 Location Planning Analysis involves the need for location decisions factors that affect them and guidelines for evaluating

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