MTI Distribution Case Discussion and Facility Location (Part 1) (4)

MTI Distribution Case Discussion and Facility Location (Part 1) (4)

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MTI Distribution Case Discussion 1
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13-2 Facility Location Decisions Chapter 13 CR (2004) Prentice Hall, Inc.
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13-3 CR (2004) Prentice Hall, Inc. Location Overview What's located? Sourcing points - Plants - Vendors - Ports Intermediate points - Warehouses - Distribution Centers - Terminals - Public facilities (fire, police, and ambulance stations) - Service centers Sink points - Retail outlets - Customers/Users
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13-4 CR (2004) Prentice Hall, Inc. Location 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 achieved
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13-5 CR (2004) Prentice Hall, Inc. Nature of Location Analysis 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. Retail Decisions are driven by revenue . Traffic flow and resulting revenue are primary location factors, cost is considered after revenue. Service Decisions are driven by service factors . Response time, accessibility, and availability are key dimensions for locating in the service industry.
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13-6 CR (2004) Prentice Hall, Inc. Some Location Theory/Practice Early economic analysis Bid rent curves Weber’s classification of industries Hoover’s tapered transport rates Agglomeration Mathematical approaches
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MTI Distribution Case Discussion and Facility Location (Part 1) (4)

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