OPERATIONS MANAGEMENT

Location Planning & Analysis

Name : Sanket Doshi

Roll No: 18 Div : A MMS

10/04/2023 Location Planning & Analysis 1

LOCATION PLANNING

• “Location” refers to the geographical position of an object, person or place

• “Planning” is both the organizational process of creating and maintaining a plan.

• “Location Planning” refers to all activities involved in determining & selecting the most suitable location and utilizing its benefits in an efficient manner.

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When is Location Planning Required

Requirement Of A New Location

Relocate An Existing Business

Expansion Of an Existing Location

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FACTORS DRIVING LOCATION DECISONS

• NEW MANUFACTURING UNIT • EXPANSION OF BUSINESS • AVAILABILITY OF RESOURCES • EMERGENCE OF NEW

CONDITIONS• UNDERTAKE COMPETION

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FACTORS AFFECTING LOCATION

Primary Factors Secondary Factors

Supply of Raw Materials

Nearness to the Market

Infrastructure Facilities

Natural

Social

Miscellaneous

Variable Weights MethodVariable weights are assigned to each factor and sites are evaluated along the factor scale..

    Potential SitesFactors Maximum

PointsS1 S2 S3 S4

F1

F2

F3

400

300

100

300

150

50

350

200

75

350

150

80

200

100

40Sum of ratings

 500 625 580 340

Equal Weights MethodEqual weights are assigned to different factors (F) and the sites (S) are evaluated among the factor scale  Potential Sites

Factors S1 S2 S3 S4

F1

F2

F3

3

4

7

6

5

2

8

9

6

2

3

3Sum of site ratings

14 13 238

Factor Rating Method

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On the basis of factor rating analysis we choose Site 1 because it has the highest weighted score.

Centre of gravity method

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Composite Measure Method

Quantitative Factors Site ‘A’ Site ‘B’ Site ‘C’Cost of Land 50000 49000 45000Buildings 450000 420000 480000Power 10000 9000 10000Freight 50000 85000 92000Water 5000 1000 3000Labour Charges 40000 25000 32000Taxes 5000 2000 4000       Total Operating Cost 610000 591000 666000       Qualitative Factors      Cost of living Very High Low ModerateHousing facilities Excellent Poor GoodCommunity Facilities Excellent Poor GoodCommunity Attitude Good Good Indifferent

Comparative appraisal of various plant sites with reference to the qualitative and quantitative factors affecting locational decisions

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Least Cost Method

The location which incurs least cost among all the locations is selected

Transportation MethodThe total transportation cost at various locations can be calculated and the location with the least total transportation cost can be chosen10/04/2023 Location Planning & Analysis 10

Importance Of Location Planning

• Reduces the Cost of production• Increase in Sales • Face Competition Effectively• Reduce Employ Turnover• Global Reputation and Goodwill

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THANK YOU…

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