Factors that affect location decisions in operations management. What are the factors that affect the location decision? 2022-10-23

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Operations management is the process of planning, organizing, and supervising the production and delivery of goods and services. One important aspect of operations management is the decision of where to locate an organization's operations. The location decision can have a significant impact on the efficiency, effectiveness, and competitiveness of the organization. Therefore, it is important for operations managers to carefully consider a number of factors when making this decision.

One key factor that affects location decisions is access to raw materials and resources. An organization needs to have access to the materials and resources required to produce its goods or deliver its services. For example, a manufacturing company may need to locate near a source of raw materials, such as iron ore for steel production. A service organization, on the other hand, may need to locate near its customers or clients.

Another factor that affects location decisions is the availability of skilled labor. An organization needs a workforce with the necessary skills and expertise to carry out its operations. Some locations may have a more highly skilled labor force than others, which can be a deciding factor in the location decision. This is particularly important for organizations that rely on highly specialized workers or that operate in industries with a limited labor pool.

The cost of doing business is another important factor that affects location decisions. This includes both the direct costs of production, such as the cost of raw materials and labor, as well as indirect costs, such as taxes, utilities, and transportation expenses. Organizations may choose to locate in areas where these costs are lower in order to increase their competitiveness and profitability.

The local business environment and regulatory climate is another factor that can impact location decisions. For example, an organization may choose to locate in an area with a supportive business environment, such as a region with strong economic growth and a favorable tax climate. On the other hand, an organization may avoid locations with burdensome regulations or a negative business climate.

Finally, organizations may consider the social and cultural factors of a location when making a location decision. This includes factors such as the quality of life for employees and the local community, as well as the cultural fit of the organization with the local community. An organization that values sustainability, for example, may choose to locate in a region with a strong commitment to environmental protection.

In conclusion, there are many factors that can affect location decisions in operations management. Organizations need to consider access to raw materials and resources, the availability of skilled labor, the cost of doing business, the local business environment and regulatory climate, and social and cultural factors when choosing where to locate their operations. Careful consideration of these factors can help organizations make informed location decisions that support their efficiency, effectiveness, and competitiveness.

What are the factors that affect the location decision?

factors that affect location decisions in operations management

Score each location on each factor based on the scale. Plant location decisions need detailed analysis: Wrong plant location generally affects cost parameters i. Consequently, there is a reduction in the transportation time and carriage inwards. Example Sugar Mills Companies construct Sugar mills close to the Sugarcane farms. However, it is important to understand that the assumption of private maximization is not a key factor when making decisions on whether to establish a new distribution point or to locate to other regions. However, there should be future pans of expanding in other areas since the current distribution points are located in countries with a lower rate of population growth. Without the online shop, they need to focus on the Asian market to grab more customers and attract them to compete globally.

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Factors affecting location decisions in

factors that affect location decisions in operations management

A great deal of attention has been paid in the research literature to critical factors in industrial location decisions for over a century Jungthirapanich and Benjamin, 1995. The optimum locations may offer competitive advantage and may contribute to the success of an enterprise. Deciding where to locate a business has always been important. These units are of three broad types: residential, business, and public. Objectives such as cost minimization, efficient material distribution, room for expansion, and safety of the plant operators and local community play important roles in the site decision. You have requested "on-the-fly" machine translation of selected content from our databases.

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Factors Affecting Location Decisions

factors that affect location decisions in operations management

Assign a weight to each factor reflecting its relative importance to the firm. For this reason, industries are set up in the areas where such climatic condition exists. What are the factors affecting the selection and location of site? Involves large capital investment 2. The factors identified have implications for management practice, for policy-making by governments and other agencies and for academic research in international operations. Which is an important factor in location selection? Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market. Ownership-specific benefits Ownership-specific benefits refer to the intangible assets of the company that provide competitive advantage.

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What is Location Decision? Definition, Factors & Example

factors that affect location decisions in operations management

Tea Factories The tea plants need moist soil for their growth. Other non-tangible features like the percentage of employees that are unionized can be measured as well. The following are a number of factors which might influence the choice of location. Community factors consist of quality of life, services, attitudes, taxes, environmental regulations, utilities, and development support. Location is a major cost factor because it 1.

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Management: Factors Affecting Location Decision

factors that affect location decisions in operations management

Further investigation conducted revealed the reality of make-or-buy decision and it was found that decision makers rarely apply strategic decision making rules based on sound reasons resulting in unpremeditated and irrational Premium Decision making Decision theory Operation Management core products require facilitating products but do not require supporting products. Location factors can be further divided into two categories: Dominant factors are those derived from competitive priorities cost, quality, time, and flexibility and have a particularly strong impact on sales or costs. What do you understand by plant location explain the factors affecting plant location in production and operation management? Under such circumstances, the decision to remain in the current place of operation would be a great decision for the company. These costs include Direct, Indirect, Fixed and Variable costs. Poor ones can cost millions in lost talent, productivity and capital. The alternative with the highest score is then chosen.

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Factors Affecting Operation Management

factors that affect location decisions in operations management

Depending on the business and market conditions, the organizations can have all facilities under single or multiple units. If the total cost of establishing additional facility in other countries is expected to be lower, then a decision to establish a new facility can work well for the company Vos and Meijboom 793. It is appropriate to divide the factors, which influence the plant location or facility location on the basis of the nature of the organization as 1. Reduced transportation cost is also included in this category. PROQUEST AND ITS LICENSORS SPECIFICALLY DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES FOR AVAILABILITY, ACCURACY, TIMELINESS, COMPLETENESS, NON-INFRINGMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Location Decision Process Step 1: Investigation Firstly, the organizations investigate their requirements regarding their location. Small Business Management: An Entrepreneurial Emphasis.

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Factors affecting Facility location decision in Operations childhealthpolicy.vumc.org

factors that affect location decisions in operations management

For instance, before choosing to establish new distribution points in other countries, managers should be aware of issues like trade-offs and profit maximization. Location conditions are hard to measure. Your use of the translations is subject to all use restrictions contained in your Electronic Products License Agreement and by using the translation functionality you agree to forgo any and all claims against ProQuest or its licensors for your use of the translation functionality and any output derived there from. We want to hear from you. Topography, area, the shape of the site, cost, drainage and other facilities, the probability of floods, earthquakes from the past history etc. So providing customers with better product and service quality is a big challenge for Mark and Spencer Ltd. There are a variety of factors that affects this decision.

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Factors that affect location decision operation management Free Essays

factors that affect location decisions in operations management

Material and Capital Security Raw materials and capital are the most crucial ingredients of Quality, Customer Care, and Expenditure Challenge Customers want a quality product with better service and affordable cost. Business Location Factors For Small Business Owners You Need To Know. Business Ethics Marks and Spencer follow each and every primary business ethics of the business environment. Availability of electric power supply over wider areas and the increasing mobility of labour have reduced the influence of geographical factors on the location of industries. Affects the amount of customer traffic 2. Areas of operations management likely to to have the most impact on the success of IKEA Premium Management. Facility location has a significant impact on different types of costs.


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