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Lesson 5 - Location Planning Flashcards

(18 cards)

1
Q

Goal Profit-oriented firms

A

base decision on profit potential

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2
Q

Non-Profit Firms

A

balance between cost and level of customer service

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3
Q

Options in location planning

A
  1. Expand an existing facility
  2. Add new location while retaining existing ones
  3. Shut down at one location and move to the other
  4. Do nothing/maintain status quo
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4
Q

Facilitating factors

A

Trade agreements: Numerous barriers to international trade have
been dropped, Technology advancements were helpful

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5
Q

Benefits of operating globally

A

expand markets, Cost savings, less restrictive and
favorable regulations, financial incentives provided by local governemnts, new
sources for ideas, new solutions to problems

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6
Q

Drawbacks

A

Transportation costs, security costs, unskilled labor, import restrictions
in some countries, criticism through unfair/unethical practices, low labor productivity

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7
Q

Risks

A

protecting intellectual property (outsourcing risk), political instability,
terrorism, economic instability might impact profitability, laws and regulations may change, ethical and cultural differences, management style conflicts, and quality issues

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8
Q

microfactory

A

small factory with narrow product focus
located near major markets

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9
Q

plant manufacturing strategy - Product Plant Strategy

A

entire products-, lines are produced in separate plants and
supplies entire domestic market, decentralized approach

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10
Q

plant manufacturing strategy - Market Area Plant Strategy

A

Plants are designed to serve particular geographic
segment, desirable when shipping costs are high, requires centralized coordination

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11
Q

plant manufacturing strategy - Process Plant Strategy

A

plants concentrate on different aspects of process, requires highly centralized administration to ensure coordination throughout the system

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12
Q

plant manufacturing strategy - General-Purpose Plant Strategy

A

Plants flexible and capable of handling a range of
products, learning opportunities and quick response time, but might be less productive

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13
Q

Geographic Information System

A

computer-based tool for collecting, storing, retrieving and displaying geographic data (population age, density, education, traffic patterns, utilities) on
maps. (could help in decision)

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14
Q

Clustering

A

When businesses locate near each other, often the case for service/retail business

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15
Q

Evaluation Techniques - Locational Cost-Profit-Volume Analysis

A

economic comparison numerically or graphically, compute total costs for each location: FC + v*Q or total revenue (Q(R-v) - FC. Graph will show for what levels of output which location is more suited

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16
Q

Evaluation Techniques -Transportation model

A

Cost-volume analysis while incorporating transportation costs
per unit to the variable costs

17
Q

Evaluation Techniques - Factor Rating

A

general approach which could also be used for buying a car for example and provides rational basis for evaluation. It establishes a composite value for each alternative that summarize all related factors (assign weight to each factor depending on importance, use a common scale and then sum points for the different factors, choose highest unless it fails to meet minimum acceptable scores)

18
Q

Evaluation Techniques - Center-of-Gravity Method

A

determine location that will minimize shipping costs or
travel time to VARIOUS locations (distribution centers: min distribution costs, fire station: min travel time) Method includes use of a map that shows locations (needs to be accurate): center of gravity is weighed average based on quantities