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Facility Location
Business systems utilize facilities like, plant
and machineries, warehouses, etc., while
performing the task of producing products/
services. A proper planning of these facility
location would definitely reduce their cost of
operation and maintenance.
Facility location decisions are very important
because they have direct bearing on factors
like, financial, employment and distribution
patterns.
of
housing
facilities
and
recreational
facilities
Demographic factors like population, trained man power,
academic institutions, standard of living, income level,
etc.
Security, culture of society
Identify
Identify
Identify
Identify
a country or countries
the general region for a location
a small number of community alternatives
site alternatives among the community alternatives
Site 3 has the highest factor rating compared with the other locations; however,
this evaluation would have to be used with other information, particularly a cost
analysis, before making a decision.
Fixed
Cost/Year, Rs
60,00,000
70,00,000
50,00,000
Variable
Cost/Unit, Rs
1,500
500
2,000
From the above table, it is clear that the total cost and break even quantity to
produce for the location B is the minimum. Hence, it is to be selected for locating
the plant.
Load-Distance Technique