Professional Documents
Culture Documents
PLANNING
AND
ANALYSIS
Anos, Rochelle Mae
Gutierrez, Jean Earl Karl
Llaneta, Denise Katrina
Mendoza, Hariette Jasher
Rose, Anna Marie
Villon, John Michael
Location Decisions
existing organizations
organization experiencing
growth demand
depletion of basic inputs
shift in markets
Existing Organizations
Example:
Shift in Markets
Regional Factors
Community Considerations
Site-Related Factors
Multiple Plant Manufacturing
Strategies
Regional Factors
location of raw materials
location of markets
labor factors
Necessity
ex. mining operations, farming, forestry
Perishability
ex. canning or freezing of fresh fruits, baking
Transportation Costs
Community Considerations
quality of life
services
attitudes
taxes
evironmental regulations
utilities
development support
Site-Related
land
transportation
environmental/legal
Global Locations
Facilitating Factors
Trade agreements
Technology
Global Locations
Benefits
Markets
Cost saving
Legal and regulatory
Financial
Others
Global Locations
Disadvantage
Transportation cost
Security Cost
Unskilled labor
Import restrictions
Criticism
Global Locations
Risk
Political
Terrorism
Economics
Legal
Cultural
Global Locations
Managing Global Operations
Locational Cost-Profit-Volume
Analysis
Transportation Model
Factor Rating
Center of Gravity Method
Locational Cost-Profit-Volume
Analysis
technique for evaluating
location choices in economic
terms
the analysis can be done
numerically or graphically
TOTAL COST= FC + v x Q
Where:
FC = Fixed cost
v = Variable cost per unit
Q = Quantity or volume of output
Example:
Location
Fixed Cost
per year
Variable Cost
per unit
$ 250, 000
$ 11
100, 000
30
150, 000
20
200, 000
35
Solution:
Fixed
Cost
+ Variable Cost =
Total
Cost
$ 250,
000
$ 11(10, 000)
$ 360,
000
100,
000
30(10, 000)
400,
000
150,
000
20(10, 000)
350,
000
200,
000
35(10, 000) =
550,
000
Transportation Model
Factor Rating
general approach to
evaluating locations that
includes quantitative and
qualitative inputs
Decide on a common scale for all factors (e.g. 0 to 100) and set a
minimum acceptable score if necessary.
3.
4.
Multiply the factor weight by the score for each factor and sum the
results for each location alternative
5.
Example:
Factor
Proximity to
existing
store
SCORES
(OUT OF
100)
Weigh Alt.
t
1
Alt.
2
WEIGHTED SCORES
Alternativ
e1
Alternativ
e2
.10
100
60
.10(100)
=10.0
.10(60) =
6.0
Traffic
volume
.05
80
80
.05 (80) =
4.0
.05 (80) =
4.0
Rental costs
.40
70
90
.40(70)
=28.0
.40(90)
=36.0
Size
.10
86
92
.10(86) =
8.6
.10(92) =
9.2
Layout
.20
40
70
.20(40) =
8.0
.20(70)
=14.0
Operating
costs
.15
80
90
.15(80)
=12.0
.15(90)
=13.5
70.6
82.7
1.00
Solution:
Alternative 2