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PLANT LOCATION (7 MAJOR FACTORS THAT AFFECT LOCATION DECISIONS (4)…
PLANT LOCATION
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STRATEGIES
Good (Cost Focus)
- Tangible costs
- transportation cost of raw material
- shipment cost of finished goods
- energy and utilities cost, labor, raw material, taxes
- Intangible and future costs
- attitude toward union
- quality of time
- quality of state and local government
- Technique
- transportation method
- factor-rating method
- crossover charts
Service (Revenue Focus)
- Volume / Revenue
- Physical quality
- parking access
- security / lighting
- Cost determination
- rent
- management caliber
- operation policies
- Technique
- factor-rating method
- traffic counts
- center-of-gravity method
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METHOD
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Factor - Rating
Steps
- Develop a list of factors called key success factors
- Assign a weight to each factor
- Develop a scale for each factor
- Score each location for each factor
- Multiply score by weight for each factor location
- Make a recommendation based on the highest point score
Center of Gravity
:checkered_flag:consider location of markets, volume of goods shipped to those markets, shipping cost or distance
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