PRODUCTION AND OPERATIONS

MANAGEMENT

Chapter 8FACILITY LOCATION

Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 8Facility Location

Plant location is the function of determining location for a plant for maximum operating economy and effectiveness.

Plant Location

Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 8Facility Location

Steps in Location Selection

To be systematic, in choosing a plant location, the entrepreneur would do well to proceed step by step, the steps being;

1. Within the country or outside;2. Selection of the region;3. Selection of the locality or community;4. Selection of the exact site.

Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 8Facility Location

1. Deciding on Domestic or International Location

2. Selection of Regioni.Availability of Raw Materials

ii.Nearness to the Market

iii.Availability of Power

iv.Transport Facilities

v.Suitability of Climate

vi.Government Policy

vii.Competition Between Status

Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 8Facility Location

3. Selection of Community• Availability of Labour• Civic Amenities for Workers• Existence of Complementary and Competing

Industries • Finance and Research Facilities • Availability of Water and Fire-fighting

Facilities• Local Taxes and Restrictions• Momentum of an Early Start• Personal Factors

4. Selection of the Sitei. Soil, Size and Topography ii. Disposal of Waste

Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 8Facility Location

Location Models

Various models are available which help identify a near ideal location. The most popular models are:

1. Factor Rating Method

2. Point Rating Method

3. Break-even Analysis

4. Qualitative Factor Analysis