Need for Location Decisions

Talha shahzadi 0004Sohail khan 0007

M. Usman khan 0014Ejaz gadi 0025

Malik saqib 0030M waseem jutt 0047

ProfNadeem

Need for Location Decisions

Existing organization may need to make location decisions for a variety of reasons.• Marketing Strategy• Growth• Depletion of Resources

Marketing Strategy

Mostly firms views locations as part of marketing strategy, and they look for locations that will help them to expand their markets. e.g. banks, fast food chains, supermarkets etc.Basically, the location decision in those case reflect the addition of new location to an existing system.

Growth

• Similar situation occurs when an organization experiences a growth in demand for its product or services that cannot be satisfied by expansion at an existing location. The addition of a new location to complement an existing system is often a realistic alternative

D e p l e ti o n o f R e s o u r c e s

• Some firms face location through depletion of basic inputs. For example fishing operations are often forced to relocate due to the temporary exhaustion of fish at given location.

Talha shahzadiReg # 0004

Nature of Location Decisions

• Importance– Long term commitment– Impacts investment requirements, operating

costs, revenue, and operations– Impacts competitive advantage– Importance of supply chain– Poor choice of location

Nature of Location Decisions

• Long term commitmentLocation decision is very important for any organization because mostly every business start for long term. • ImpactImpacts on investment requirements, operating costs, revenue, and operations. These are change able due to change of demand.

Cont,

• Impacts on competitive advantageManufacturing and services organizations, can have a significant impact on competitive advantages. • Importance of supply chainSupply chain is the system by which organizations source, make and deliver their products or services according to market demand.

Ejaz ahmedReg # 0025

Cont,

• Poor choice of locati on

Poor choice of location result in excessive transportation cost, shortage of qualified labor, inadequate supply of raw material

Sohail khanReg # 0007

Objective & options of location decision

• Objectives Profit potential• OptionsI. Expand existing facilitiesII. Add new facilitiesIII. MoveIV. Do nothing

Objective of location decision

• Profi t potenti al

The basic purpose of profit oriented organizations get maximum profit base their decision on profit prospective. Whereas non profit organizations struggle achieve balance between cost and the level of customer service they provide.

Waseem juttReg # oo47

Location options

There are four options of locations Expand existi ng fac i l iti esThis option can be attractive if there is adequate room for expansion especially if the location has desirable features that are not readily available elsewhere. Add new locati onAnother option is to add new location while retaining existing ones, as is done in many retail operation

Cont,

MOVEA third option is to shut down at one location and move to another. DO NOTHINGFinally organizations have the option of doing nothing (a firm may decide to maintain the status quo at least for the time being)

Malik Saqib Reg # 0030

General procedure for making location decision

The way an organization approaches location decisions depends on its size and the nature or scope of its operations.The general procedure for making location decisions consist of the following steps.1. Decide on criteriaTo use for evaluating location alternative such as increase revenue or community service.

Cont,

2. Identify important factorsSuch as location of market or raw material.3. Develop location alternativea) Identify general region for a location.b) Identify small number of community

alternatives.c) Identify site alternatives among the community

alternatives.4. Evaluate the alternative and make selection