1 / 5

Facility Location Strategies managementsupport

Facility Location Strategies http://www.managementsupport.com. Importance of Location. Up to 25% of the product’s selling cost Once a company commits to a location, many costs are fixed and difficult to change Energy Labor Location depends on the type of business

lysandra-cannon
Download Presentation

Facility Location Strategies managementsupport

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Facility Location Strategieshttp://www.managementsupport.com

  2. Importance of Location • Up to 25% of the product’s selling cost • Once a company commits to a location, many costs are fixed and difficult to change • Energy • Labor • Location depends on the type of business • Manufacturing – minimizing cost • Retail and professional services – maximizing revenue • Warehouse – cost and speed of delivery

  3. Location Decision Example – BMWCountry Decision Factors Market location • U.S. is world’s largest luxury car market • Growing (baby boomers) Labor • Lower manufacturing labor costs • $17/hr. (U.S.) vs. $27 (Germany) • Higher labor productivity • 11 holidays (U.S.) vs. 31 (Germany) Other • Lower shipping cost ($2,500/car less) • New plant & equipment would increase productivity (lower cost/car $2,000-3000)

  4. Costs: Tangible Vs. Intangible • Tangible costs – those that are readily identifiable and precisely measured • Utilities • Labor • Material • Taxes • Depreciation • Other costs that accounting can easily identify • Intangible costs – not easily quantifiable • Quality of education • Public transportation facilities • Community attitudes toward the industry and the company • Quality and attitude of prospective employees • Climate

  5. Steps in Factor Rating Method

More Related