FACILITY LOCATION AROMAL M S

Facility location is the process of identifying the best geographic location for a service or production facility

Selecting suitable location for economic and effective operations.

FACILITY OR PLANT LOCATION

While starting a new factory.  During the expansion of the existing

plant. When the existing plant is to be re-

located at some other place, to remove the drawbacks of the present location or to gain the benefits of a still better location.

Expiry of lease and the non renewal.

Need for selecting a suitable site or location

Reduce operating cost and capital investment

Effective plant layout Coordinating with government

policies Employee Security, welfare and

public needs

OBJECTIVES IN LOCATION DECISION

With in the country or outside

Selection of the regionSelection of locality or community

Selection of the exact site

STEPS IN LOCATION SELECTION

Domestic OR International Which country?

And the decision is taken on the basis ofPolitical/legal concerns.Export or import quotasCurrency exchange rateCultural issues

With in the country or outside

Availability of resources(raw materials ,HR) and customers

Market facilities Transportation and climate Government incentives Economic and environmental

conditions

Selection of the region

Availability of work force Complementary business in the area Availability of safety needs and basic

needs of employees Tax in the area Effectiveness in the initial stages

Selection of locality or community

Waste disposal Soil and topology

Selection of the exact site

Heavy manufacturing facilities Large, require space, expensive

Light industry facilities Smaller , cleaner plants , less costly

Retail and service facilities Smallest and least costly

TYPES OF FACILITIES

LOCAION FACTOR RATING1. Develop a list of relevant factors.2. Assign a weight to each factor reflecting

its relative importance to the firm.3. Develop a rating scale for the factors.4. Score each location on each factor

based on the scale.5. Multiply the scores by the weights for

each factor and total the weighted scores for each location.

6. Make a recommendation based on the maximum point score, considering other factors.

LOCATION ANALYSIS TECHNIQUES

CENTER OF GRAVITY TECHNIQUE Location at center of all

geographical areas or branches Reduce cost during

transportation

Load distance Calculation of distance with load Choosing the load with lowest

distanced one Distance must be minimum

BREAK EVEN ANALYSIS Method of selection of point where

total revenue equal total cost

WEIGHTED FACTOR RATING Merge quantitative and qualitative

factors Weightage given to the factors and

best one is being selected.

THANK YOU…