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Selecting a Location and Planning the Facilities

Selecting a Location and Planning the Facilities. 10. PowerPoint Presentation by Thomas M c Kaig, Ryerson University. Looking Ahead. After studying this chapter, you should be able to: 1. Identify the factors affecting the choice of a business location.

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Selecting a Location and Planning the Facilities

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  1. Selecting a Location and Planning the Facilities 10 PowerPoint Presentation by Thomas McKaig, Ryerson University

  2. Looking Ahead After studying this chapter, you should be able to: 1. Identify the factors affecting the choice of a business location. 2. Describe the attraction and challenges of a home-based business. 3. Explain how efficiency can be achieved in the layout of a physical facility. 4. Understand the equipment needs of small firms.

  3. Key Factors in the Location Decision • Customer accessibility • As a matter of access by target customers • As a matter of customer convenience • As a necessity to avoid shipping costs • Environmental business conditions • Climate-related factors • Business environment factors • Competitors, legal requirements, and tax structure

  4. Key Factors in the Location Decision • Resource Availability • Nearness to raw materials • Availability of a suitable labour supply • Access to adequate and reliable transportation • Personal Preference of the Entrepreneur • Familiarity with home community • Familiarity of community with entrepreneur • Site Availability and Costs • Difficulty of locating a good site • Business incubator provides shared space, services, and management assistance for new businesses …continued

  5. Key Factors in the Location Decision • Site Availability and Costs (continued) • Large costs for and commitment required to purchase site outright. • Leasing avoids a large cash outlay and allows the owners to postpone committing to the site before the business becomes a success.

  6. Environmental Resource Business Availability Optimum Conditions Location Entrepreneur's Customer Personal Accessibility Preference Site Availability and Costs Five Key Factors in Determininga Good Business Location Figure 10-1

  7. Home-Based Businesses • Advantages • Low start-up and overhead costs • Convenience for family and lifestyle • Technology • Advances in office equipment allow home-based business to compete with commercial sites

  8. Challenges of Home-Based Businesses • Challenges • Family and business conflicts • The need to observe regular business hours and establish spatial boundaries (specific work areas) to avoid distractions. • Business image of a home-based business • Professional image is difficult to maintain in a home environment. • Legal considerations • Local laws and zoning ordinances prohibit many types of home-based businesses.

  9. Designing the Physical Facilities • Functional Requirements • Physical facilities should be of adequate size and accommodation • Ideal building is one that matches the functional requirements of the business • Considerations include: • Age and condition of building • Fire hazards • Heating and air conditioning • Lighting and restroom facilities • Entrances and exits

  10. Factory Layout • Factory Layout • Process layout • A factory design that groups similar machines together • Product layout • A factory design that arranges machines according to their roles in the production process

  11. Retail Store Layout • Retail Store Layout • Grid pattern • A block-like layout that provides for good merchandise exposure and simplifies security and cleaning • Free-flow pattern • A flexible layout that is visually appealing and gives the customers the freedom of movement • Self-service layout • A design that gives customers direct access to merchandise

  12. Display Racks Display Racks Racks Display Racks Door Door Check-out Storage Office Restrooms Grid Pattern for Retail Store

  13. Racks Office Storage Door Display Check-out Door Table Storage Display Racks Free-Flow Pattern

  14. Arranging Merchandise • Impulse Goods • Place where they can easily be seen and near or at the register/checkout area • Customer-Necessary goods • Place at the back of the store or in out-of-the-way places where customers must seek them out. • Entry Areas • Put goods at right front of store to catch customers’ eye as they enter the store.

  15. Equipping the Physical Facilities • Manufacturing Equipment • General-purpose equipment • Machines that serve many functions in the productionsystem • Special-purpose equipment • Machines designed to serve specialized functions in the production process …continued

  16. Equipping the Physical Facilities HANDLE WITH CARE • General-Purpose Equipment • Low purchase cost • Flexible production • Good resale value • Special-PurposeEquipment • Low labour cost • High hourly output

  17. Retail Store Equipment • Necessary Office Equipment • Computers • Networks, e-mail • Fax machines • Copiers and printers • Telephone systems • Voice mail • Interactive voice response (IVR)

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