PRODUCTION AND OPERATION

MANAGEMENT

INDUSTRY CHOSEN: LUXURY FASHION

SERVICE PROVIDED: RETAIL STORE

SUBMITTED BY: SUBMITTED TO:

Aditi Jhunjhunwala DR. RICHA AGARWAL
Anchal Gupta
Muskan Soni
Rajvi Virani
Yashvi Bansal
BBA (2018-21)
INDEX

SR.N CONTENT
O
1. INTRODUCTION TO FASHION INDUSTRY
2. WHY DID WE CHOSE FASHION INDUSTRY
3. CONVERSION PROCESS
4. PRODUCTION SYSTEM
5. CORE SERVICES
6. VALUE- ADDED SERVICES
7. PRODUCT DESIGN
8. PROCESS AND OPERATION DESIGN
9. PROCESS STRATEGY
10. SKU’S
11. PROCESS SELECTION
12. PROCESS PLANNING
13. CAPACITY PLANNING
14. FORECASTING
15. PLANT LAYOUT
16. PLANT LOCATION
EXECUTIVE SUMMARY
The objective of this report is to identify and evaluate the Production and
Operation Management of the fashion industry, which we will be operating in.
We will be providing a service to the consumers, in which we will procure the
goods and further sell it to the customers.

The conversion process includes the conversion of inputs such as land, capital,
labour, suppliers and equipment, storage layout , everything designed in a way
which helps in providing the outcome of best experiential shopping for our
customers.
 INTRODUCTION TO FASHION INDUSTRY

 Fashion industry, is a multibillion-dollar global enterprise which is

devoted to the business of making and selling clothes.
 Fashion can be best defined as styles of clothing and accessories worn by
people all the time. However, the fashion industry encompasses the
design, manufacturing, distribution, marketing, retailing, advertising,
and promotion of all clothes, from high-end fashion as displayed in Ney
York Fashion show, to the clothes available to us in the local market.
 This industry is extremely dynamic and employees millions of people
internationally.
 Fashions industry isn’t particularly new but its meaning has changed in
the past few decades. Assumed to be conventionally to be for females,
male gender has also been seen more involved in it as boundaries are
being pushed.
 The fashion industry consists of four levels: the production of raw
materials; the production of fashion goods by designers, manufacturers
and others; retail sales; and various forms of advertising and promotion.

WHY FASHION INDUSTRY?

1. The global luxury apparel market size was valued at USD 67.85 billion in
2018 expanding at a CAGR of 3.5% over the forecast period.

2. Rising number of millionaires and brand loyalty among customers are

anticipated to fuel the growth.

3. Rising perception among consumers that luxury goods contribute to

greater social acceptance, is driving the product demand.

4. Increasing disposable income and consumer spending on luxury

products are also prominent factors driving demand.

5. The increased accessibility has also contributed a lot in the proper

functioning of the whole cycle.

OPERATIONS MANAGEMENT
  Operations Management can be defined as the management of the
conversion process, which converts all FACTORS OF PRODUCTION. viz.,
Land, Labour, Capital, and Management inputs into desired OUTPUTS of
Goods and Services Inputs (FOPs) Outputs (Goods/Services).

CONCEPTS INVOLVED IN MANAGING THE

PRODUCTION AND OPERATIONS

OUR CONVERSION/TRANSFORMATION PROCESS

 INPUTS
LABOUR
LAND - ON RENT The employees and
personnel who come into
PHYSICAL STORE contact with the customers,
and 2 designers and tailors
for customization

STORE LAYOUT
CAPITAL FURNISHINGS
OWNERS FUND shelves, racks, hangers,
and display cases.

Signs and window Inventory and retail

display materials management

SUPPLIERS AND MACHINERY

EQUIPMENTS
COMPUTERS,CAMERAS
SECURITY MACHINES.

 OUTPUT
 EXPERENTIAL SHOPPING
Our output would mainly
include the experience of our
customers while shopping and
best quality clothes through
the experience.
BRAND EVANGELIST
Brand evangelists are our most
valuable customers—they
enthusiastically recommend
our brand simply because they
enjoy it, which is the most valuable
type of free advertising.

 RANDOM FLUCTUATIONS

PANDEMICS /EPIDEMICS- As is has been pretty evident in this particular year,

Pandemics can cause a huge disruption in every aspect of the business. Which
is why a company needs a contingency plan to best be prepared to get back up
when something like happens.
LABOUR TURNOVER- Labour turnover is extremely important as low labour
would mean that the company is spending more time training the set of new
employees which isn’t efficient and effective for the country.
SUDDEN CHANGE IN TASTE PREFERENCE OF CUSTOMERS- As Fashion is a
dynamic field, with new trends coming up every week, the products have a
chance of running obsolete, which is why it is really important to remain
updated and keep up with the trends.
LACK OF PROPER INVENTORY MANAGEMENT- Due to the fast-changing
nature and high demand in the fashion industry, inventory management is as
important function as any. As this will help keep as much as less of gap
between demand and supply.
INCREASE IN NUMBER OF COMPETITORS- it is important to maintain a loyal
customer base as fashion is an extremely competitive field. 
RECESSIONS- the market conditions affect all the businesses, as we cannot
control the them, we can take measures to prepare for it beforehand.
 

 FEEDBACK
1. COUPONS, DISCOUNTS- These are extremely effective, providing coupon
codes and discounts lure the customers to get associated with the
brand, which gives the brand a chance to establish a contact which helps
the brand retain them.
2. PERKS AND INSCENTIVES – These are valid for all the stakeholders.
These are used to provide benefits to customers, so as to gain a
competitive advantage in the market.
3. BACKUP SUPPLIERS – These are extremely important as this helps in
getting the supply chain back on track and have as less as diversion
possible in case of any.
4. MAINTAINING PROPER INVENTORY LEVELS- Having less inventory is as
dangerous as having excess supply, which is why balance is important as
the company has to make sure that is doesn’t over/under-utilise the
resources.

OUR PRODUCTION SYSTEM

 Job shop:
Although our designs are as per latest trends and styles still, we believe in providing
a personalized and customized touch to our customers by designing as per their
requirements.
We would keep two designers and two tailors, so anyone interested can get us the
fabric and tell us the design and we would create the required piece.
Our production system i.e., job shop is something that sets us apart from other
existing fashion retailers in the industry. Designing and working this way helps us in
getting happy customers.

 Batch to mass:
As fashion industry is very dynamic and to keep up with trends, we need to change
our production regularly and hence we decided to produce tops, formal wear and
dresses in batches. However, for bottom wear and some basic tees we have decided
to produce in masses

OUR CORE SERVICES

1. SHOPPING EXPERIENCE
2. VALUE FOR MONEY EXPERIENCE
3. COMFORATBLE AND LONG-LASTING CLOTHES

VALUE-ADDED SERVICE
 INFORMATIONAL SUPPORT:
 Giving information about current trends. Suggesting the matching things which can
include accessories, matching footwear, etc. (suggestions would be based on taste of
the customers and not the sales personnel.)

OUR PRODUCT DESIGN

Product design is the engine to drive the success of fashion industry, considering the fast-
changing fashion trend and turbulent market demand.
We have adopted the enhanced design strategy to quickly produce the most fashionable
items by collaborating with the manufacturer that does extensive investigation on the latest
customer preference and taste
We will use Original Design Manufacturing (ODM) strategy (that produced by someone and
we will rebrand it and sell) in order to enjoy the advantages of low costs and professional
design skills of the outsourcing service provider.
We would buy only those goods that keep in mind the less consumption of resources and
design for environment, wherein our products can be recycled.
BRICK AND MORTAR
It is commonly seen in the current fashion retail industry that manufacturers sell fashion
products directly to end customers through traditional retail outlets. As we believe that
online stores cannot replace the traditional retail stores because there are many customers
who like to see, touch, and evaluate the products in person before making a purchase, so
we do not intend to go online.
SHIPPING
Decisions about product shipment is important to both of us i.e. fashion manufacturers and
retailers, because they affect our costs, flexibility, and inventory management. To deal with
the problem of stock, we use a fast shipment strategy between our manufacturer and us
ensuring that once the inventory level of the decreases below a contracted level, the
supplier would help in the shipment of goods without an extra cost.
Beside the fast shipment strategy, we would enter in a multi-shipment contract with
manufacturer to help us in optimizing our inventory control policy and better satisfy the
market demand, in which the we would determine the ordering quantity for each shipment.
The multi-shipment contract will enable us in small batch productions to ease the peak
season pressure. This way we can enjoy a reduction in the inventory holding cost while
maintaining a high level of customer service.

IDEA DEVELOPMENT
• Brick and mortar retailer store wherein customers can check and try displayed
clothes and accessories
• PS: We aim to provide customers with trendy and high fashion products at not so
expensive price to fulfil their variable requirements.

TARGET MARKET
• WOMEN 15-50 YEARS

• Our target market mostly comprises of women of the age demographic 15-50 years.
As fashion is an everlasting field, it is better to keep such a wide range of customer as
it gives us more chance to cater to a bigger audience for our product.

MARKETING STRATEGY
3E'S APPROACH:
• EXPERIENCE
• EXCHANGE
• EVANGELISM

HOW WILL OUR PRODUCT DESIGN HELP US?

 It would help us in providing experiential shopping to our customer.
 Give us competitive edge over other brands
 It would help in repeat sales which in turn would boost our profits.
 It would also help us in keeping transparency and flexibility.

FACTORS THAT AFFECTED OUR PRODUCT DESIGN:

Geographical location – our product should be accessible to the customers
as having the product in their hands is the ultimate goal of a customer while
buying the product. The product should be accessible as then and only then
will the transaction can actually succeed.

Size and length of walkway

Use of furniture and exterior space - the outlook of the place helps to
grab the customers attention, and it also gives customer pride and a more
trust-worthy feeling when they are buying from a store which looks attractive,
especially when they are interacting for the first time.

Style of Architecture

Colour of paints

Design of entrance

Way of display

Customer buying behaviour – the company would maintain a database

which would contain all the information about the customers, and help us
understand the preferences and use this information to provide better
services.

Inventory – As much as it is important to maintain inventory, updating it also

holds the same value.

Maintenance and overhead costs- these are the costs every company has
to bear and a company could look for some alternatives which would help
minimise them.

OUR APPROACH TOWARDS THE PRODUCT DESIGN

1. Aesthetics and appearances
a. Floor layout,
b. Furniture layout
c. Way of displaying our products i.e., clothes and accessories.

2. In this type of business model CAD and engineering can be done as per
one’s requirement and budget.

PROCESS AND OPERATION DESIGN

1. TRAINING PROGRAMS:
 For keeping up with proper display layouts, proper training would be
given to employees regularly.
 In order to ensure smooth functioning, we would organise regular
meetings.

2. DESIGN STANDARDS:
 Our floor layout plan would be free flow layout as it would give space
and help in free movement of customers.

3. DESIGN FOR PACKAGING AND HANDLING:

 The products in our inventory would properly be packed and stacked in
cardboard boxes to save them from any damage.
 Packaging for customers would be done with recycled paper polythene
bags, as our brand ethos lies in providing eco-friendly materials.
 Holistic packaging design would help us in providing perceived quality
and to extent of taking care of safety requirements during parts of
handling.
  Our display layout would be wall mounted cloth racking and shelving will
be done for accessories. This would help in aesthetic display of our
trendy products. And proper placement of dummies as per the layout
would be done.

The entry and exit points to the store would be placed in such a way that the
customers have to cover everything in the store, as in we will make sure they
pass by every section of the store. This will help us ensure that every product is
visible to the customers and nothing is being left out.
4. PRODUCT MATERIAL COMPLIANCE:
 Retail data analysis and planogram plan.
 Our product category would be clothing for women in all sizes and
accessories
 With the help of planogram, we would increase our retail sales per
square foot and hence we would be able to decrease our cost.
 PROCESS STRATEGY

 An organization's approach to selection of the process for the conversion of resource

inputs into outputs.
 The process selected will have a long-term effect on the efficiency and production as
well as flexibility, cost and quality of the goods produced.
  Key aspects in process strategy include:
I. Make or buy decisions: In-house vs Outsourcing:
Outsourcing would be used for procuring the finished products from local vendors
this would help in reducing the logistics costs and enabling an experimental approach
to be taken in new markets.
II. Capital intensity: Mix of equipment and labour to be used:
Our process strategy would be capital intensive which would include mix of labour
and technology
III. Process flexibility: Adjustments possible changes in product/service design, volume
of products or changes in technology:
The process strategy followed by us would be rigid in nature, a little disruption in
transportation or logistic would cost us a lot, however when it comes to outsourcing it
would be flexible as we could change our supplier as per the need and demand.

 The strategy used by us will be:

PROCESS FOCUS:
 A production facility organized around process to facilitate low volume, high variety
production”

 Facilities are organized around specific activities or processes.

 General purpose equipment and skilled personnel.
 High degree of product flexibility.
 Typically, high costs and low equipment utilization.
 Product flows may vary considerably making planning and scheduling a
challenge.
ADVANTAGES:
 Greater product flexibility
 More general-purpose equipment
 Lower initial capital investment
DISADVANTAGES:
 More difficult production planning and control
  Low equipment utilization (5% to 25%)

SKU’S
 SKU (pronounced “skew”), short for stock keeping unit, is used by
retailers to identify and track its inventory, or stock. A SKU is a unique
code consisting of letters and numbers that identify characteristics about
each product, such as manufacturer, brand, style, colour, and size.

WOMEN

SIZE PRODUCT MATERIAL SKU’S INVENTORY

XS 20 100

S 20 100
JEANS,
M TSHIRTS COTTON, 20 100
AND TOPS, HOSIERY, SILK,
L ONE-PIECE, LINEN, 20 100
XL FORMALS 20 100

XXL 20 100

6 5 4 120 600

PROCESS SELECTION

 Process selection refers to deciding on the way production of goods or

services will be organized. Processes convert inputs to outputs; they are
the core of operations management.
  Process Selection of our fashion retail outlet:

Customer Involvement
As we know customers want in-person service that they can’t get online. So, to
achieve this higher customer involvement we will gather customer data and
use it to personalize offers and interactions such as loyalty rewards discount
offers, coupons, membership cards etc. We will have employees which are well
– trained and skilled to make our customers experience outstanding. We will
even have feedback forms for our customers to get their reviews.

Capital/Labour Intensive

As we know customers want everything technological friendly and easy to use.

So, our outlet will be a high capital intensive as we are going to have well
developed use of technology such as artificial intelligence, for scanning
products, making payments and free wi-fi facility as well. But along with that
we will also be having employees which are well trained and skilled to
manually help the customers. Both capital intensity and labour productivity
will help in long – run profits of our outlet.

Resource Flexibility 

Resource flexibility refers to potential changes in the deployment and

utilization of internal resources.  We will be implementing resource flexibility
by having workforce which are trained in more than one thing so we can utilise
them efficiently and effectively. We would also be using our warehouses for
multiple purpose and will try to reuse our resources to save cost.
 PROCESS PLANNING

Production is an activity performed by manufacturers. However, it is also

closely related to us i.e., the retailers and market demand. Considering the
highly volatile demand and long lead time, it is critical and challenging to make
efficient and effective production decisions, including the optimal quantity to
produce, time to produce and ship, and price to sell. A good production plan
can improve the profitability for both of us (manufacturers and sellers),
increase market share, raise consumer satisfaction, and reduce inventory
costs.
For, the incapability of manufacturers to supply products timely to capture the
ever-changing market trend leads to a loss in market share. In order to deal
with these problems, we have decided to place orders long before the selling
season.
However, a high inventory holding cost is incurred and the flexibility of reacting
to real market demand is impaired. To deal with the capacity restrictions, we
are planning to provide discounts and offers for the same.
For the same we would enter into a contract production. Contract production
is essentially a strategy to achieve quick response and supply chain
coordination. In contract production, the fashion manufacturer produces
products according to the contract signed with the retailer i.e., us. For
example, the manufacturer can produce a contracted quantity of fashion
products long before the season and provide the retailer with a low cost.
However, owing to the uncertainty in demand, we often face the risk of having
redundant reserved capacity and inventory. Therefore, it is important for us to
enter into contract with different suppliers on the basis of unit capacity
reservation fee and distribution fare considerations.
 CAPACITY PLANNING

The production system design planning considers input requirements,

conversion process and output. After considering the forecast and long-term
planning organization should undertake capacity planning. Capacity is the
maximum level of output that a company can sustain to make a product or
provide a service. Planning for capacity requires management to accept
limitations on the production process.
In general, terms capacity is referred as maximum production capacity, which
can be attained within a normal working schedule. Capacity planning is
essential to be determining optimum utilization of resource and plays an
important role decision-making process, for example, extension of existing
operations (Increasing overall production), starting of new product line etc.

TYPES OF CAPACITY

Production capacity: Maximum rate of production or output of an

organization.
For ex: The capacity of our fashion retail would vary, which can possibly attain
at the time of festive seasons.
Design capacity: The maximum output that can possibly be attained under
ideal conditions.
Effective capacity: The maximum output given a product mix, scheduling
difficulties, machine maintenance, quality factors, absenteeism etc., under
normal (realistic) conditions.
Maximum capacity: The maximum output that a facility can achieve under
ideal conditions. Also known as peak capacity.
For ex: Our peak capacity could be at the time of discounts and sales.

Efficiency / Utilisation

As per number of people we are serving:

 Design capacity: Serving 250 people (In an hour)
 Effective capacity: 200 people (In an hour)
 Actual capacity: 180 people (in an hour)

Efficiency: actual capacity / effective capacity = 180 / 200 = 90%

Utilisation: actual capacity / design capacity = 180/250 = 72%

As per the clothes that we receive from our suppliers:

 Design capacity: 1000 units weekly, if our truck is completely loaded
 Effective capacity: 800 units due to weekly maintenance, you maybe
your one truck can’t deliver for that time.
 Actual capacity: 750 units because for example say if 800 items are
transported and some get damaged in transit due to overload.

Efficiency: actual capacity / effective capacity = 750 / 800 = 93.75%

Utilisation: actual capacity / design capacity = 750/1000 = 75%

BOTTLENECK OPERATIONS
Planning in fashion retail Industry cannot be bottlenecked. It is an inflexible
operation and process. Each process can be carried out one at a time. Each
process is connected with each other hence the time taken cannot be reduced
via bottlenecking.

BREAK-EVEN POINT
Total fixed cost: This cost is fixed and will not change as sales increase or
decrease. These are expenses that your business will have regardless of the
sales volume. Some of our fixed costs are:

 Rent
 Salary
 Licensing and permitting fees
 Store fixtures (racks, hanger etc)
 Equipment and technology
 Janitorial supplies and services. (cleaner)
 Business insurance
 Signage
 Some professional services like accountants
 Other operating costs
ALL THE BELOW FIGURES ARE TENTATIVE

STYLE 1 STYLE 2 STYLE3

(30 UNITS) (50 UNITS) (80 UNITS)

VARIABLE COSTS 10000*30 10000*50 10000*80

(1000 PER UNIT) = 300,000 = 500,000 = 800,000

100,000 100,000 100,000

FIXED COSTS
(RS 100,000)
400,000/30 600,000/50 900,000/80
AVERAGE COSTS
=13,334 = 12,000 = 11250

TOTAL COST 400,000 600,000 900,000

SALES REVENUE 350,000 600,000 10,00,000

From the above table the best operating level would be at 80 units where the
average cost is the lowest.

BREAK - EVEN POINT

1200000

1000000
PROFIT
AMOUNT (in Rs.)

800000
TOTAL COSTS
600000 SALES REVEUES
400000
BREAK - EVEN
200000 POINT
0
STYLE 1 (30 units) STYLE 2 (50 units) STYLE 3 (80 units)
OUTPUT

The X-axis shows the total output, and the y-axis shows the amount, and our
break-even point is 50 units, as ₹6,00,000. This means that any output which is
below 50 units, will result in loss for the firm. Similarly, any output above 50
units will yield a profit.
The firm will need to procure at least 50 units to get in a situation where it
doesn’t face any profit or loss. However, it will need atleast 80 units to achieve
the economies of scale.
 COST VOLUME RELATIONSHIP
1000000
900000
800000
700000
AMOUNT (in Rs.)

TOTAL COSTS
600000
VARIABLE COSTS
500000 FIXED COSTS
400000
300000
200000
100000
0
STYLE 1 (30 units) STYLE 2 (50 units) STYLE 3 (80 units)
OUTPUT

As the total fixed cost is always the same, we can see that out variable cost
increases with increase in units. As the number of units increase, there is a
diminishing rate of gain obtained from one additional unit of consumption or
even production.

FORECASTING

Forecasting involves using several different methods to estimate and

determine possible future outcomes for the business. It involves making
predictions of the future based on the past and present data and most
commonly to analysis the trend. Detail forecasts for individual items are used
to plan the short-run use of the conversion system. Forecasting is only possible
when there is existing data of both past as well as the present.
In the fashion retail Industry, they keep records of the current trend which
keeps going on in the market, which further helps them to do the further
analysis. The data of the customers who buy the trendy clothes are well
recorded to know their taste and preferences. However, being in fashion retail
sector it is very difficult to forecast preferences as the same previous
customer’s taste has changed and now, they want something different. But
forecasting does help us in knowing how much quantity are we supposed to
outsource from our suppliers.
EXPONENTIAL METHOD
 EXPONENTIAL
16,000 14,000
14,000 12,000
12,000
10,000
10,000
8,000
8,000
6,000
6,000
4,000
4,000
2,000 2,000

0 0
1 2 3 4 5 6 7 8 9 10 11 12

X axis shows months, y axis shows demand, for the above graph. Series 2
represent 0.1 exponential, series 3 represent 0.2 exponential, series 4
represent 0.3 exponential.

SIMPLE AVERAGE METHOD

A simple moving average (SMA) is an arithmetic moving average calculated by
adding recent closing prices and then dividing that by the number of time
periods in the calculation average. A simple, or arithmetic, moving average
that is calculated by adding the closing price of the security for a number of
time periods and then dividing this total by that same number of periods.
Short-term averages respond quickly to changes in the price of the underlying,
while long-term averages are slow to react.
 Simple avg method
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1 2 3 4 5 6

DEMAND 10,000 7,500 9,000 12,000 11,050 12,800

3 MONTHS AVG - - - 8,833 9,500 10,683
6 MONTHS AVG - - - - - -

As per the above graph, x axis represents months y axis represents demand.
The blue bars portray the demand, red line represents the 3 months average
and grey line represents the 6 months average.

WEIGHTED AVERAGE
PLANT LAYOUT
Our plant layout is based on the retail layout format and we have used free
form layout for our customers. Our layout will have the following signage and
graphics:
 Promotional signage in the display area to attract the customers

 Point of sale: During the sale seasons when some products are given on
discount or if any product is given using the promotional strategy of buy
1 get 2 free.

 Lifestyle images: Here, we will place a television unit behind the cash
counter as well as at equal intervals to display the videos, images of
models wearing our brand so that customers get attracted to it.
 Our store layout will look like this:
 PLANT LOCATION

Location decisions are strategic, long-term and non-repetitive in nature.

Without sound and careful location planning in the beginning itself, the new
facilities may create continuous operating problems in future. Location
decision also affects the efficiency, effectiveness, productivity and profitability.
The strategic significance of facility location is connected with capacity
decisions. Indeed, the issue of capacity expansion immediately raises the
companion issue of where to expand in order to tie in effectively with the
distribution network.
Retail store location is also an important factor to consider while setting
retail strategy. Here are some reasons −
  Business location is a unique factor which the competitors cannot
imitate. Hence, it can give a strong competitive advantage.
 Selection of retail location is a long-term decision.
 It requires long-term capital investment.
 Good location is the key element for attracting customers to the
outlet.
 A well-located store makes supply and distribution easier.
 Locations can help to change customers’ buying habits
For ex:
For our fashion retail location, we have taken into consideration
Surat - A and Mumbai - B.

1) Factor Rating Method

 We have listed all the relevant factors in the location
decision.
 Then we have rated each factor according to its relative
relevance (on the scale of 1 to 5).
 We have rated each location in accordance to that factor (on
the scale 1 to 5).
 We have computed the product of ratings.
 We have then computed the sum of the product of ratings for
each location.
 We have implemented a final decision and select the location
alternative which has the maximum sum of the product
ratings.

FACTORS FACTOR LOCATION PRODUCT

RATING RATING RATING
A A B A B
B
INFRASTRUCTURE, 5 4 3 20 15
SIZE OF 5
CATCHMENT AREA

QUALITY OF 4 4 4 16 20
LABOUR 5

PROXIMITY TO 5 5 3 25
CUSTOMERS 5 15

5 5 3 25 15
CUSTOMER TRAFFIC 5

PROXIMITY TO 4 5 3 20 12
SUPPLIERS 4

5 4 5 20 25
COSTS
5

28 28 21 126
TOTAL
29 102

Factors taken into consideration:

 Size of Catchment Area and infrastructure – being in fashion
retail industry it is really important to keep up with infrastructure
and size of catchment area also the plant layout as these things
attracts the customers and it helps in differentiating one from its
competitors.
 Occupancy Costs – These refers to costs of lease/owning in
different areas, property taxes, location maintenance costs. A
perfect location would be the one with least cost and maximum
resources.
 Customer Traffic −It can be considered as most important factor,
it refers number of customers visiting the location, number of
private vehicles passing through the location, number of
pedestrians visiting the location. The more the traffic the better is
the location.
  Proximity to customers and suppliers – When it comes to
fashion retail proximity of customers is very important as if the
location would not be accessible by customers then customers
would not shop frequent and it would lead to low sales. And when
it comes to proximity of suppliers it is very important that our outlet
is close and easily reachable by suppliers or else it would disrupt
our supply chain.
 Quality of labour – In any type of business, quality of labour plays
an important role.

After considering all the above factors we think that option A i.e., Surat
would be a better location and might give us competitive edge for our
fashion retail outlet rather than B i.e., Mumbai.

2.) CENTRE OF MASS METHOD

The center of gravity method is used for locating single facilities that
considers existing facilities, the distances between them, and the
volumes of goods to be shipped between them.
This methodology involves formulas used to compute the coordinates of
the two-dimensional point that meets the distance and volume criteria
stated above.

RETAIL OUTLETS UNITS SOLD in 24 hrs.

RAHUL RAJ (R) 150

VR MALL (V) 200

CENTRAL MALL (C) 100

Y-AXIS

V (200, 250)
 R (100, 150) C (250,150)

X-AXIS

C (X) = ∑(x coordinates (R, V, C) * number of units) / total number of

Units.
C (X) = (100*150 + 200*200 + 250*100) = 177.77
150 + 200 + 100

C (Y) = ∑(y coordinates (R, V, C) * number of units) / total number of

Units.
C (Y) = (150 *150 + 250 *200 + 250*100) = 223.33
150 + 200 + 100

 C (X, Y) = (177.77, 223.33)

(CENTRE FOR GRAVITY)
  Hence, the ideal location for opening up new outlet would be
something closest to our Centre of gravity i.e. (177.77, 223.33) as
per example would be VR mall (v) (200,250)

CONCLUSION

Fashion Industry is definitely one of the most dynamic industries, with new
trends and fads coming in every day, however, it is growing at a rapid speed
too. This is one of those industries, which has rare chances of going backwards.
With more people realising and expressing their inner selves through fashion,
investing in this industry is definitely the right decision to make. As this is can
be seen in the report as well.
Because of this reason, production and operation management is even more
important, in an industry for which availability of product at the right place and
at the right time is of utmost importance, management its production and the
smooth working of its operations is what can make or break the company.