OPERATIONS MANAGEMENT

Location Planning & Analysis

Name : Sanket Doshi Roll No: 18 Div : A MMS

23-04-2013

Location Planning & Analysis

LOCATION PLANNING
Location refers to the geographical position of an object, person or place Planning is both the organizational process of creating and maintaining a plan. Location Planning refers to all activities involved in determining & selecting the most suitable location and utilizing its benefits in an efficient manner.
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When is Location Planning Required Requirement Of A New Location Relocate An Existing Business
Expansion Of an Existing Location

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Location Planning & Analysis

FACTORS DRIVING LOCATION DECISONS

NEW MANUFACTURING UNIT EXPANSION OF BUSINESS AVAILABILITY OF RESOURCES EMERGENCE OF NEW CONDITIONS UNDERTAKE COMPETION

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Location Planning & Analysis

FACTORS AFFECTING LOCATION

Primary Factors
Supply of Raw Materials Nearness to the Market

Secondary Factors
Natural Social Miscellaneous

Infrastructure Facilities

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Location Planning & Analysis

Equal weights are assigned to different factors (F) and the sites (S) are evaluated among the factor scale
Potential Sites
Factors
F1 F2 F3 Sum of ratings S1 3 4 7 site 14 S2 6 5 2 13 S3 8 9 6 23 S4 2 3 3 8

Equal Weights Method

Variable Weights Method

Variable weights are assigned to each factor and sites are evaluated along the factor scale..
Potential Sites
Factors
F1 F2 F3 Sum of ratings Maximum Points 400 300 100 S1 300 150 50 500 S2 350 200 75 625 S3 350 150 80 580 S4 200 100 40 340

Factor Rating Method

On the basis of factor rating analysis we choose Site 1 because it has the highest weighted score.

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Location Planning & Analysis

Centre of gravity method

ly coordinate l
i i

X cg

lx coordinate l
i i

Ycg

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Location Planning & Analysis

Composite Measure Method

Comparative appraisal of various plant sites with reference to the qualitative and quantitative factors affecting locational decisions
Quantitative Factors Cost of Land Buildings Power Freight Water Labour Charges Taxes Total Operating Cost Qualitative Factors Cost of living Housing facilities Community Facilities Community Attitude 23-04-2013 Site A 50000 450000 10000 50000 5000 40000 5000 610000 Site B 49000 420000 9000 85000 1000 25000 2000 591000 Site C 45000 480000 10000 92000 3000 32000 4000 666000

Very High Excellent Excellent Good

Low Poor Poor Good

Moderate Good Good Indifferent 9

Location Planning & Analysis

Least Cost Method

The location which incurs least cost among all the locations is selected

Transportation Method
The total transportation cost at various locations can be calculated and the location with the least total transportation cost can be chosen
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Importance Of Location Planning

Reduces the Cost of production Increase in Sales Face Competition Effectively Reduce Employ Turnover Global Reputation and Goodwill

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