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OperationsManagement Chapter 8 –Chapter 8 –Location StrategiesLocation Strategies
PowerPoint presentation to accompanyPowerPoint presentation to accompany
Heizer/RenderHeizer/Render
Principles of Operations Management !ePrinciples of Operations Management !e
Operations Management "eOperations Management "e
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O#tlineO#tline
$lo%al Company Profile&$lo%al Company Profile&'ed() 'ed()
*he Strategic +mportance of*he Strategic +mportance ofLocationLocation
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O#tline – Contin#ed O#tline – Contin#ed
'actors *hat ,ffect Location'actors *hat ,ffect Location-ecisions-ecisions
La%or Prod#cti.ity La%or Prod#cti.ity
()change Rates and C#rrency Riss()change Rates and C#rrency Riss
CostsCosts
Political Ris 0al#es and C#lt#rePolitical Ris 0al#es and C#lt#re
Pro)imity to MaretsPro)imity to Marets
Pro)imity to S#ppliersPro)imity to S#ppliers
Pro)imity to Competitors 1Cl#stering2Pro)imity to Competitors 1Cl#stering2
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O#tline – Contin#ed O#tline – Contin#ed
Methods of (.al#ating LocationMethods of (.al#ating Location ,lternati.es ,lternati.es
*he 'actor3Rating Method *he 'actor3Rating Method Locational 4rea3(.en ,nalysisLocational 4rea3(.en ,nalysis
Center3of3$ra.ity Method Center3of3$ra.ity Method
*ransportation Model *ransportation Model
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O#tline – Contin#ed O#tline – Contin#ed
Ser.ice Location Strategy Ser.ice Location Strategy
How Hotel Chains Select SitesHow Hotel Chains Select Sites
*he Call Center +nd#stry *he Call Center +nd#stry
$eographic +nformation Systems$eographic +nformation Systems
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Learning O%5ecti.esLearning O%5ecti.es
6hen yo# complete this chapter yo#6hen yo# complete this chapter yo#sho#ld %e a%le to&sho#ld %e a%le to&
77 +dentify and e)plain se.en ma5or factors+dentify and e)plain se.en ma5or factorsthat effect location decisionsthat effect location decisions
99 Comp#te la%or prod#cti.ity Comp#te la%or prod#cti.ity
:: ,pply the factor3rating method ,pply the factor3rating method
;; Complete a locational %rea3e.enComplete a locational %rea3e.enanalysis graphically and mathematically analysis graphically and mathematically
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'ederal ()press'ederal ()press
Central h#% concept Central h#% concept
(na%les ser.ice to more locations with(na%les ser.ice to more locations with
fewer aircraft fewer aircraft (na%les matching of aircraft flights with(na%les matching of aircraft flights with
pacage loads pacage loads
Red#ces mishandling and delay in transitRed#ces mishandling and delay in transit
%eca#se there is total control of%eca#se there is total control of pacages from pic#p to deli.ery pacages from pic#p to deli.ery
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Location Strategy Location Strategy
One of the most important decisions aOne of the most important decisions afirm maesfirm maes
+ncreasingly glo%al in nat#re+ncreasingly glo%al in nat#re Significant impact on fi)ed andSignificant impact on fi)ed and
.aria%le costs.aria%le costs
-ecisions made relati.ely infre>#ently -ecisions made relati.ely infre>#ently
*he o%5ecti.e is to ma)imize the*he o%5ecti.e is to ma)imize the%enefit of location to the firm%enefit of location to the firm
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Location and CostsLocation and Costs
Location decisions %ased on lowLocation decisions %ased on lowcost re>#ire caref#l considerationcost re>#ire caref#l consideration
Once in place location3relatedOnce in place location3relatedcosts are fi)ed in place andcosts are fi)ed in place anddiffic#lt to red#cediffic#lt to red#ce
-etermining optimal facility-etermining optimal facilitylocation is a god in.estment location is a god in.estment
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Location and +nno.ationLocation and +nno.ation
Cost is not always the most importantCost is not always the most importantaspect of a strategic decisionaspect of a strategic decision
'o#r ey attri%#tes when strategy is'o#r ey attri%#tes when strategy is%ased on inno.ation%ased on inno.ation
High3>#ality and specialized inp#tsHigh3>#ality and specialized inp#ts
,n en.ironment that enco#rages ,n en.ironment that enco#rages
in.estment and local ri.alry in.estment and local ri.alry
, sophisticated local maret , sophisticated local maret
Local presence of related andLocal presence of related and
s#pporting ind#striess#pporting ind#stries
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Location -ecisionsLocation -ecisions
Long3term decisionsLong3term decisions
-ecisions made infre>#ently -ecisions made infre>#ently -ecision greatly affects %oth fi)ed-ecision greatly affects %oth fi)ed
and .aria%le costsand .aria%le costs
Once committed to a locationOnce committed to a locationmany reso#rce and cost iss#esmany reso#rce and cost iss#esare diffic#lt to changeare diffic#lt to change
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Location -ecisionsLocation -ecisions
Co#ntry -ecisionCo#ntry -ecision Critical S#ccess 'actorsCritical S#ccess 'actors
77 Political riss go.ernmentPolitical riss go.ernmentr#les attit#des incenti.esr#les attit#des incenti.es
99 C#lt#ral and economicC#lt#ral and economiciss#esiss#es
:: Location of maretsLocation of marets
;; La%or talent attit#desLa%or talent attit#des
prod#cti.ity costs prod#cti.ity costs
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Location -ecisionsLocation -ecisions
Region/Region/Comm#nityComm#nity
-ecision-ecision
Critical S#ccess 'actorsCritical S#ccess 'actors
77 Corporate desiresCorporate desires
99 ,ttracti.eness of region ,ttracti.eness of region
:: La%or a.aila%ility costsLa%or a.aila%ility costsattit#des towards #nionsattit#des towards #nions
;; Costs and a.aila%ility of #tilitiesCosts and a.aila%ility of #tilities
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Location -ecisionsLocation -ecisions
Site -ecisionSite -ecision Critical S#ccess 'actorsCritical S#ccess 'actors
77 Site size and cost Site size and cost
99 ,ir rail highway and ,ir rail highway andwaterway systemswaterway systems
:: Aoning restrictionsAoning restrictions
;; Pro)imity of ser.ices/Pro)imity of ser.ices/s#pplies needed s#pplies needed
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$rowth Competiti.eness$rowth Competiti.eness+nde) of Co#ntries+nde) of Co#ntries
Co#ntry Co#ntry 9BB?39BB! Ran 9BB?39BB! Ran 9BB< Ran 9BB< Ran
Switzerland Switzerland 77 ;;
=S,=S, ? ? 77
apanapan ! ! 7B 7B $ermany $ermany 8 8 ? ?
=D =D 7B 7B ""
+srael +srael 7
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
La%or prod#cti.ity La%or prod#cti.ity
6age rates are not the only cost 6age rates are not the only cost
Lower prod#ction may increase total cost Lower prod#ction may increase total cost
La%or cost per day La%or cost per day
Prod#ction 1#nits per day2Prod#ction 1#nits per day2E Cost per #nit E Cost per #nit
Connectic#t Connectic#t
= $1.17= $1.17 per #nit per #nit $70$70
6060 #nits#nits
#arez #arez
= $1.25= $1.25 per #nit per #nit $25$25
2020 #nits#nits
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
()change rates and c#rrency riss()change rates and c#rrency riss
Can ha.e a significant impact on costCan ha.e a significant impact on coststr#ct#restr#ct#re
Rates change o.er timeRates change o.er time
CostsCosts
*angi%le 3 easily meas#red costs s#ch as*angi%le 3 easily meas#red costs s#ch as
#tilities la%or materials ta)es#tilities la%or materials ta)es
+ntangi%le 3 less easy to >#antify and+ntangi%le 3 less easy to >#antify andincl#de ed#cation p#%lic transportationincl#de ed#cation p#%lic transportationcomm#nity >#ality3of3lifecomm#nity >#ality3of3life
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
()change rates and c#rrency riss()change rates and c#rrency riss
Can ha.e a significant impact on costCan ha.e a significant impact on coststr#ct#restr#ct#re
Rates change o.er timeRates change o.er time
CostsCosts
*angi%le 3 easily meas#red costs s#ch as*angi%le 3 easily meas#red costs s#ch as
#tilities la%or materials ta)es#tilities la%or materials ta)es
+ntangi%le 3 less easy to >#antify and+ntangi%le 3 less easy to >#antify andincl#de ed#cation p#%lic transportationincl#de ed#cation p#%lic transportationcomm#nity >#ality3of3lifecomm#nity >#ality3of3life
Locationdecisions %asedon costs alone
can create
diffic#lt ethicalsit#ations
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
Political ris .al#es and c#lt#rePolitical ris .al#es and c#lt#re
@ational state local go.ernments@ational state local go.ernments
attit#des toward pri.ate and intellect#alattit#des toward pri.ate and intellect#al property zoning poll#tion employment property zoning poll#tion employmentsta%ility may %e in fl#) sta%ility may %e in fl#)
6orer attit#des towards t#rno.er #nions6orer attit#des towards t#rno.er #nionsa%senteeisma%senteeism
$lo%ally c#lt#res ha.e different attit#des$lo%ally c#lt#res ha.e different attit#destowards p#nct#ality legal and ethicaltowards p#nct#ality legal and ethicaliss#esiss#es
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Raning Corr#ptionRaning Corr#ption
Ran Ran Co#ntry Co#ntry 9BB? CP+ Score 1o#t of 7B29BB? CP+ Score 1o#t of 7B2
77 'inland 'inland "? "?
77 +celand +celand "? "?
77 @ew Aealand @ew Aealand "? "?
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
Pro)imity to maretsPro)imity to marets
0ery important to ser.ices0ery important to ser.ices
+* systems or high transportation costs+* systems or high transportation costsmay mae it important to man#fact#rersmay mae it important to man#fact#rers
Pro)imity to s#ppliersPro)imity to s#ppliers
Perisha%le goods high transportationPerisha%le goods high transportationcosts %#ly prod#ctscosts %#ly prod#cts
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'actors *hat ,ffect'actors *hat ,ffectLocation -ecisionsLocation -ecisions
Pro)imity to competitorsPro)imity to competitors
Called cl#stering Called cl#stering
Often dri.en %y reso#rces s#ch as nat#ralOften dri.en %y reso#rces s#ch as nat#ralinformation capital talent information capital talent
'o#nd in %oth man#fact#ring and ser.ice'o#nd in %oth man#fact#ring and ser.iceind#striesind#stries
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Cl#stering of CompaniesCl#stering of Companies
+nd#stry +nd#stry LocationsLocations Reason for cl#stering Reason for cl#stering
6ine maing 6ine maing @apa 0alley 1=S2@apa 0alley 1=S24ordea#) region4ordea#) region1'rance21'rance2
@at#ral reso#rces of@at#ral reso#rces ofland and climateland and climate
Software firmsSoftware firms Silicon 0alleySilicon 0alley4oston 4angalore4oston 4angalore1+ndia21+ndia2
*alent reso#rces of*alent reso#rces of%right grad#ates in%right grad#ates inscientific/technicalscientific/technicalareas .ent#reareas .ent#recapitalists near%y capitalists near%y
Race carRace car%#ilders%#ilders
H#ntington/@orthH#ntington/@orthHampton regionHampton region1(ngland21(ngland2
Critical mass of talentCritical mass of talentand informationand information
Table 8.3Table 8.3
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Cl#stering of CompaniesCl#stering of Companies
+nd#stry +nd#stry LocationsLocations Reason for cl#stering Reason for cl#stering
*heme pars*heme pars1-isney 6orld1-isney 6orld=ni.ersal=ni.ersalSt#dios2St#dios2
Orlando 'loridaOrlando 'lorida , hot spot for , hot spot forentertainment warmentertainment warmweather to#rists andweather to#rists andine)pensi.e la%or ine)pensi.e la%or
(lectronics(lectronicsfirmsfirms
@orthern Me)ico@orthern Me)ico @,'*, d#ty free@,'*, d#ty freee)port to =S e)port to =S
Comp#terComp#ter
hardwarehardwareman#fact#rersman#fact#rers
Singapore *aiwanSingapore *aiwan High technologicalHigh technological
penetration rate and penetration rate and per capita $-P per capita $-Psilled/ed#catedsilled/ed#catedworforce with largeworforce with large
pool of engineers pool of engineers
Table 8.3Table 8.3
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Cl#stering of CompaniesCl#stering of Companies
+nd#stry +nd#stry LocationsLocations Reason for cl#stering Reason for cl#stering
'ast food'ast foodchainschains16endyFs16endyFsMc-onaldFsMc-onaldFs4#rger Ding4#rger Dingand Pizza H#t2and Pizza H#t2
Sites within 7 mileSites within 7 mileof each other of each other
Stim#late food salesStim#late food saleshigh traffic flowshigh traffic flows
$eneral$enerala.iation aircrafta.iation aircraft1Cessna1CessnaLear5et 4oeing2Lear5et 4oeing2
6ichita Dansas6ichita Dansas Mass of a.iation sillsMass of a.iation sills
OrthopedicOrthopedicde.icesde.ices
6arsaw +ndiana6arsaw +ndiana Ready s#pply of silledReady s#pply of silledworers strong =Sworers strong =Smaret maret
Table 8.3Table 8.3
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'actor3Rating Method 'actor3Rating Method
Pop#lar %eca#se a wide .ariety of factorsPop#lar %eca#se a wide .ariety of factorscan %e incl#ded in the analysiscan %e incl#ded in the analysis
Si) steps in the method Si) steps in the method
77 -e.elop a list of rele.ant factors called-e.elop a list of rele.ant factors calledcritical s#ccess factorscritical s#ccess factors
99 ,ssign a weight to each factor ,ssign a weight to each factor
:: -e.elop a scale for each factor -e.elop a scale for each factor
;; Score each location for each factor Score each location for each factor
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'actor3Rating ()ample'actor3Rating ()ample
Critical Critical ScoresScoresS#ccessS#ccess 1o#t of 7BB21o#t of 7BB2 6eighted Scores6eighted Scores'actor 'actor 6eight 6eight 'rance'rance -enmar -enmar 'rance'rance -enmar -enmar
La%orLa%ora.aila%ility a.aila%ility
and attit#de and attit#de .25.25 7070 6060 (.25)(70) = 17.5(.25)(70) = 17.5 (.25)(60) = 15.0(.25)(60) = 15.0People3to3 People3to3 car ratiocar ratio .05.05 5050 6060 (.05)(50) = 2.5(.05)(50) = 2.5 (.05)(60) = 3.0(.05)(60) = 3.0
Per capitaPer capita incomeincome .10.10 8585 8080 (.10)(85) = 8.5(.10)(85) = 8.5 (.10)(80) = 8.0(.10)(80) = 8.0
*a) str#ct#re*a) str#ct#re .39.39 7575 7070 (.39)(75) = 29.3(.39)(75) = 29.3 (.39)(70) = 27.3(.39)(70) = 27.3(d#cation(d#cation and healthand health .21.21 6060 7070 (.21)(60) = 12.6(.21)(60) = 12.6 (.21)(70) = 14.7(.21)(70) = 14.7
*otals*otals 1.001.00 70.470.4 68.068.0
Table 8.4Table 8.4
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LocationalLocational
4rea3(.en ,nalysis4rea3(.en ,nalysis Method of cost3.ol#me analysis #sed forMethod of cost3.ol#me analysis #sed for
ind#strial locationsind#strial locations
*hree steps in the method *hree steps in the method 77 -etermine fi)ed and .aria%le costs for-etermine fi)ed and .aria%le costs for
each locationeach location
99 Plot the cost for each locationPlot the cost for each location
:: Select location with lowest total cost forSelect location with lowest total cost fore)pected prod#ction .ol#mee)pected prod#ction .ol#me
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Locational 4rea3(.enLocational 4rea3(.en
,nalysis ()ample ,nalysis ()ample*hree locations&*hree locations&
,ron ,ron $30,000$30,000 $75$75 $180,000$180,000
4owling $reen4owling $reen $60,000$60,000 $45$45 $150,000$150,000ChicagoChicago $110,000$110,000 $25$25 $160,000$160,000
'i)ed 'i)ed 0aria%le0aria%le *otal *otal City City Cost Cost Cost Cost Cost Cost
*otal Cost E 'i)ed Cost G 10aria%le Cost ) 0ol#me2*otal Cost E 'i)ed Cost G 10aria%le Cost ) 0ol#me2
Selling priceSelling price = $120= $120
()pected .ol#me()pected .ol#me = 2,000= 2,000 #nits#nits
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Locational 4rea3(.enLocational 4rea3(.en
,nalysis ()ample ,nalysis ()ample
–78BBBB78BBBB –
–7?BBBB7?BBBB –7
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Center3of3$ra.ity Method Center3of3$ra.ity Method
'inds location of distri%#tion'inds location of distri%#tioncenter that minimizes distri%#tioncenter that minimizes distri%#tion
costscosts
ConsidersConsiders
Location of maretsLocation of marets
0ol#me of goods shipped to those0ol#me of goods shipped to thosemaretsmarets
Shipping cost 1or distance2Shipping cost 1or distance2
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Center3of3$ra.ity Method Center3of3$ra.ity Method
Place e)isting locations on aPlace e)isting locations on acoordinate grid coordinate grid
$rid origin and scale is ar%itrary$rid origin and scale is ar%itrary
Maintain relati.e distancesMaintain relati.e distances
Calc#late J and K coordinates forCalc#late J and K coordinates for
center of gra.ityF center of gra.ityF ,ss#mes cost is directly ,ss#mes cost is directly
proportional to distance and proportional to distance and.ol#me shipped .ol#me shipped
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Center3of3$ra.ity Method Center3of3$ra.ity Method
) 3 coordinate E ) 3 coordinate E
∑∑d d i) i) i i
∑∑ i i i i
i i
∑∑d d iy iy i i
∑∑ i i i i
i i
y 3 coordinate Ey 3 coordinate E
wherewhere d d i) i) EE )3coordinate of )3coordinate of
location i location i
d d iy iy EE y3coordinate ofy3coordinate of
location i location i EE
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Center3of3$ra.ity Method Center3of3$ra.ity Method
@orth3So#th@orth3So#th
(ast36est (ast36est
79B79B –
"B"B –
?B?B –
:B:B –
–
I I I I I I
:B :B ?B ?B "B "B 79B 79B 7
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Center3of3$ra.ity Method Center3of3$ra.ity Method
@#m%er of Containers@#m%er of ContainersStore LocationStore Location Shipped per MonthShipped per Month
ChicagoChicago (30, 120)(30, 120) 2,0002,000
Pitts%#rghPitts%#rgh (90, 110)(90, 110) 1,0001,000
@ew Kor@ew Kor (130, 130)(130, 130) 1,0001,000 ,tlanta ,tlanta (60, 40)(60, 40) 2,0002,000
)3coordinate E )3coordinate E(30)(2000) + (90)(1000) + (130)(1000) + (60)(2000)(30)(2000) + (90)(1000) + (130)(1000) + (60)(2000)
2000 + 1000 + 1000 + 20002000 + 1000 + 1000 + 2000
EE 66.766.7
y3coordinate Ey3coordinate E(120)(2000) + (110)(1000) + (130)(1000) + (40)(2000)(120)(2000) + (110)(1000) + (130)(1000) + (40)(2000)
2000 + 1000 + 1000 + 20002000 + 1000 + 1000 + 2000
EE 93.393.3
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Center3of3$ra.ity Method Center3of3$ra.ity Method
@orth3So#th@orth3So#th
(ast36est (ast36est
79B79B –
"B"B –
?B?B –
:B:B –
–
I I I I I I
:B :B ?B ?B "B "B 79B 79B 7
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*ransportation Model *ransportation Model
'inds amo#nt to %e shipped from'inds amo#nt to %e shipped fromse.eral points of s#pply to se.eralse.eral points of s#pply to se.eral
points of demand points of demand Sol#tion will minimize totalSol#tion will minimize total
prod#ction and shipping costs prod#ction and shipping costs
, special class of linear , special class of linear programming pro%lems programming pro%lems
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6orldwide -istri%#tion of6orldwide -istri%#tion of
0olswagens and Parts0olswagens and Parts
Figure 8.4Figure 8.4
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Ser.ice Location Strategy Ser.ice Location Strategy
7 P#rchasing power of c#stomer3drawing area7 P#rchasing power of c#stomer3drawing area
9 Ser.ice and image compati%ility with demographics9 Ser.ice and image compati%ility with demographicsof the c#stomer3drawing areaof the c#stomer3drawing area
: Competition in the area: Competition in the area; #ality of the competition; #ality of the competition
#eness of the firmFs and competitorsF locations#eness of the firmFs and competitorsF locations
? Physical >#alities of facilities and neigh%oring? Physical >#alities of facilities and neigh%oring
%#sinesses%#sinesses
! Operating policies of the firm! Operating policies of the firm
8 #ality of management 8 #ality of management
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Location StrategiesLocation Strategies
Ser.ice/Retail/Professional LocationSer.ice/Retail/Professional Location $oods3Prod#cing Location$oods3Prod#cing Location Re.en#e 'oc#sRe.en#e 'oc#s Cost 'oc#sCost 'oc#s
0ol#me/re.en#e0ol#me/re.en#e
-rawing areaN p#rchasing power -rawing areaN p#rchasing power
CompetitionN ad.ertising/pricing CompetitionN ad.ertising/pricing
Physical >#ality Physical >#ality
Paring/accessN sec#rity/lightingNParing/accessN sec#rity/lightingNappearance/imageappearance/image
Cost determinantsCost determinants
Rent Rent
Management cali%er Management cali%er
Operations policies 1ho#rs wageOperations policies 1ho#rs wagerates2rates2
*angi%le costs*angi%le costs
*ransportation cost of raw*ransportation cost of rawmaterial material
Shipment cost of finished goodsShipment cost of finished goods
(nergy and #tility costN la%orN raw(nergy and #tility costN la%orN rawmaterialN ta)es and so onmaterialN ta)es and so on
+ntangi%le and f#t#re costs+ntangi%le and f#t#re costs
,ttit#de toward #nion ,ttit#de toward #nion
#ality of life#ality of life
(d#cation e)pendit#res %y state(d#cation e)pendit#res %y state
#ality of state and local#ality of state and localgo.ernment go.ernment
Table 8.6Table 8.6
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Location StrategiesLocation Strategies
Ser.ice/Retail/Professional LocationSer.ice/Retail/Professional Location $oods3Prod#cing Location$oods3Prod#cing Location
*echni>#es*echni>#es *echni>#es*echni>#es
Regression models to determineRegression models to determineimportance of .ario#s factorsimportance of .ario#s factors
'actor3rating method 'actor3rating method
*raffic co#nts*raffic co#nts
-emographic analysis of drawing area-emographic analysis of drawing area
P#rchasing power analysis of areaP#rchasing power analysis of area
Center3of3gra.ity method Center3of3gra.ity method
$eographic information systems$eographic information systems
*ransportation method *ransportation method
'actor3rating method 'actor3rating method Locational %rea3e.en analysisLocational %rea3e.en analysis
Crosso.er chartsCrosso.er charts
Table 8.6Table 8.6
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Location StrategiesLocation Strategies
Ser.ice/Retail/Professional LocationSer.ice/Retail/Professional Location $oods3Prod#cing Location$oods3Prod#cing Location
,ss#mptions ,ss#mptions ,ss#mptions ,ss#mptions
Location is a ma5or determinant ofLocation is a ma5or determinant ofre.en#ere.en#e
High c#stomer3contact iss#es areHigh c#stomer3contact iss#es arecritical critical
Costs are relati.ely constant for aCosts are relati.ely constant for agi.en areaN therefore the re.en#egi.en areaN therefore the re.en#ef#nction is critical f#nction is critical
Location is a ma5or determinant ofLocation is a ma5or determinant ofcost cost
Most ma5or costs can %e identifiedMost ma5or costs can %e identifiede)plicitly for each sitee)plicitly for each site
Low c#stomer contact allows foc#sLow c#stomer contact allows foc#son the identifia%le costson the identifia%le costs
+ntangi%le costs can %e e.al#ated +ntangi%le costs can %e e.al#ated
Table 8.6Table 8.6
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How Hotel Chains Select SitesHow Hotel Chains Select Sites
Location is a strategically importantLocation is a strategically importantdecision in the hospitality ind#stry decision in the hospitality ind#stry
La #inta started with :< independentLa #inta started with :< independent
.aria%les and wored to refine a.aria%les and wored to refine aregression model to predict profita%ility regression model to predict profita%ility
*he final model had only fo#r .aria%les*he final model had only fo#r .aria%les
Price of the innPrice of the inn
Median income le.elsMedian income le.els
State pop#lation per innState pop#lation per inn
Location of near%y collegesLocation of near%y colleges
r 9 = .51
51% of the profita%ility is predicted %y
5#st these fo#r.aria%les
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*he Call Center +nd#stry *he Call Center +nd#stry
Re>#ires neither face3to3faceRe>#ires neither face3to3face
contact nor mo.ement of materialscontact nor mo.ement of materials Has .ery %road location optionsHas .ery %road location options
*raditional .aria%les are no longer*raditional .aria%les are no longer
rele.ant rele.ant Cost and a.aila%ility of la%or mayCost and a.aila%ility of la%or may
dri.e location decisionsdri.e location decisions
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$eographic +nformation$eographic +nformation
Systems 1$+S2Systems 1$+S2 +mportant tool to help in location analysis+mportant tool to help in location analysis
(na%les more comple) demographic(na%les more comple) demographic
analysisanalysis ,.aila%le data %ases incl#de ,.aila%le data %ases incl#de
-etailed cens#s data-etailed cens#s data
-etailed maps-etailed maps
=tilities=tilities
$eographic feat#res$eographic feat#res
Locations of ma5or ser.icesLocations of ma5or ser.ices
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$eographic +nformation$eographic +nformation
Systems 1$+S2Systems 1$+S2