Course : Operations Management

Year :  2020

Location Strategies
 Learning Objectives

• Identify and explain seven major factors that

affect location decisions.
• Apply the factor-rating method
• Complete a location break-even analysis
graphically and mathematically
• Use the center-of-gravity method
 Need for Location
Decisions

• Marketing Strategy
• Cost of Doing Business
• Growth
• Depletion of Resources
 Factors That Affect
Location Decision

• Labor Productivity
• Exchange Rates and Currency Risk
• Costs
• Political Risk, Values, and Culture
• Proximity to Markets
• Proximity to Suppliers
• Proximity to Competitiors

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 Methods of Evaluating
Location Alternatives

• The Factor-Rating Method

• Location Break-Even Analysis
• Transportation Model

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 5. Service Location Strategy

1. Purchasing power of the customer-drawing area

2. Service and image compatibility with demographics of the
customer-drawing area
3. Competition in the area
4. Quality of the competition
5. Uniqueness of the firm’s and competitor’s location
6. Physical qualities of facilities and neighboring business
7. Operating policies of the firm
8. Quality of management

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Excercises
 Learning Objectives

• Describe four production processes.

• Use the tools of process analysis.
• Describe customer interaction in process
design.