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Service Operation Management (S.O.M) Topic 3: Service Facility Location…
Service Operation Management (S.O.M)
Topic 3: Service Facility Location
Strategic Location Consideration
Competitive Clustering
A reaction to consumer buying behaviour (when choosing among competitors)
Consumers like to make comparisons
Seek out area where many shops selling similar products are concentrated (for convenience)
eg. Auto dealers (Alexandra Road), Sporting goods (Queensway), IT goods (Sim Lim Square)
Saturation Marketing
Idea is to group outlets of the same firm near each other in high traffic areas
eg. MacDonald's, 7-11, etc
Factors to Consider when Selecting Location for Overseas Business
1.
Government Policies and Regulations
Rules
Political Risk
Policy
Attitude
Exchange Rates
Taxes
2.
Economic & Social
GDP
Purchasing power
Culture
3.
Market
Locations
Size
Demand
Competition
4.
Infrastructures
Air & sea ports
Telecommuncations
Roads
Costs
Rental
Transportation
Supplier
Availibity
7.
Labour
Workers and management staff
Availability
Productivity
Cost
Site Selection Factors
Access
Convenient to expressways
Accessible by pubic transport
Visiblity
Availability of sign placement
3.
Traffic
Traffic volume in that area might increase potential sales
4.
Parking
Adequate parking
5.
Expansion
Room for expansion
6.
Environment
Immediate surrounding should complement the service
7.
Competition
Location of competitors
8.
Government
Zoning restrictions
Taxes
9.
Labor
Available labor with appropriate skills
10.
Complements
Complementary services nearby
Cross-Median Approach for a Single Facility
Step 1
:
Plot the points of a graph with x&y axis
Step 2
Calculate the
median
eg. 1+2+3+5 /
2
Step 3
Map out X coordinates from
both
left and right directions
Move the line until cumulative "w" is equal to or more than
median
Step 4
Map out Y coordinates from
both
left and right directions
Move the line until cumulative "w" is equal to or more than
median