Chapter 8 Location Planning and Analysis

Question 1

What are the reasons to Globalize Operations?

Answer 1

• Reduce costs
• Improve supply chain
• Generate new business
• Understand markets
• Learn to improve operations
• Attract and retain global talent

Question 2

Managing Global Operations

Answer 2

• Other Languages-over 200 dialects in China
• Different norms and customs
• Work-Force Management
• Unfamiliar Laws and Regulations
• Unexpected Cost Mix

Question 3

What are the Disadvantages of Global Location?

Answer 3

• Transportation costs & time
• Security costs
• Unskilled labor
• Import restrictions
• Criticism for locating out-of-country

Question 4

Location Options

Answer 4

• Do nothing
• Expand existing facility
• Maintain existing facility and add an additional facility or facilities elsewhere
• Close existing facility and move to another location

Question 5

Location Decisions - Manufacturing

Answer 5

• Favorable labor climate
• Proximity to Markets
• Proximity to Supplies
• Proximity to Parent Company
• Utilities, Taxes, and Real Estate Costs
• Quality of Life

Question 6

What are the Quality of Life Factors?

Answer 6

• Education K-12
• Availability of affordable housing
• Reasonable cost of living
• Nearby colleges and universities
• Low crime rate
• Day care facilities
• Attractiveness of environment

Question 7

Location Decisions - Services

Answer 7

• Proximity to customers
• Costs
• Location of Competitors
• Support Systems (Hospitals, Pharmacies, FD, hotels)
• Geographical/Environment
• Personal Desires of CEO

Question 8

What are Factors Affecting County?

Answer 8

• Government rules, attitudes, stability, incentives
• Culture and economy
• Market location
• Labor availability, attitudes, productivity and cost
• Availability of supplies, communications, energy

Question 9

What are the Factors Affecting Region?

Answer 9

• Corporate desires
• Attractiveness of region
• Costs and availability of utilities
• Environmental issues
• Governmental incentives
• Proximity to customers and suppliers
• Land/construction costs

Question 10

Geographical Information System (GIS)

Answer 10

• A computer-based tool for collecting, storing, retrieving, and displaying demographic data on maps
• Aids decision makers in
- Targeting market segments
- Identifying locations relative to their market potential
- Planning distribution networks
• Portraying relevant information on a map makes it easier for decision makers to understand

Question 11

What is the Center of Gravity Method?

Answer 11

• Finds location of single distribution center serving several destinations
• Used primarily for services
• Considers location of existing destinations, volume to be shipped, and shipping distance

Question 12

Detailed Cost Analysis

Answer 12

• Compare expenses of different options
• Examples of expenses include:
transportation, labor, plant overhead, utilities, taxes
Also consider savings

Question 13

Factor Rating

Answer 13

• Most widely used location technique
• Useful for service and industrial locations
• Intangible (qualitative) factors
• Tangible (quantitative) factors

Question 14

Factors Affecting Site

Answer 14

•  Site size and cost
•  Air, rail, highway, and waterway systems
Zoning restrictions
•  Nearness of services/supplies needed
•  Environmental impact issues