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Production and Operations Management
Notes
Table 12.1: Facility Planning Matrix
Level Activity Space Planning Unit Environment
Site Location &
Global Sites World or Country
Selection
Site Features, and Site and Building
Macro Layout Site Planning
Departments Concept
Facility, Building Buildings, Workstations
Micro Layout Plant or Departments
and Factory Layout Features
Workstation & Cell
Sub-Micro Layout Tool & Fixture Locations Workstation & Cells
Design
Self Assessment
Fill in the blanks:
3. Location is a critical element in determining…………. and…………. costs for both industrial
and service firms.
4. Heavy manufacturing facilities are primarily plants that are relatively large and require
a lot of space and as a result, are ……………… to construct.
5. The single most important factor for locating a service or retail facility is ……………to
customers.
12.3 Factors Affecting Location Decisions
12.3.1 Factors Affecting Manufactured Products
Manufactured products differ from many service products as production may take place at a
location, and then the goods are distributed to the customer. Often the source of raw materials
is an important factor in deciding locations. Very often, you want to locate your operation close
to that source of raw material.
Example: In aquaculture, the incubation of salmon eggs and the first stage lifecycle of
the fish are done in fresh water. Therefore, it is advantageous to locate hatcheries where there is
an abundance of fresh water.
The typical factors that require consideration are:
1. Location of markets: Locating plants and facilities near the market for a particular product
or service may be of primary importance for many products in the sense that location may
impact the economics of the manufacturing process. This may be because of:
(a) Increased bulk or weight of the product
(b) Product may be fragile.
(c) It susceptible to spoilage.
(d) Add to transportation costs.
(e) Increase transit time.
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