lecture 6

Question 1

reasons to make location decisions

Answer 1

1. offering services at new locations –> part of growth strategy
2. current service facility unable to meet increased demand

Question 2

3 possible options of making location decisions

Answer 2

1. enlarge an existing facility
2. close the present one and open one or more new ones on new sites
3. open one or more new sites

Question 3

site selection considerations

Answer 3

1. accessability : convenient to freeway exits/served by public transportation
2. visibility : sign placements
3. parking : adequate off-street parking
4. environment : immediate surrounding complements service (e.g. parking in shopping mall)
5. competition : location of competitors
6. traffic flow : low traffic volume (congestion –> hinders provide service)
7. expansion : room available for further expansion
8. government : zoning restrictions, taxes

Question 4

classification of service facility location issues

Answer 4

1. geographical representation –> network or plane
   plane –> metropolitan or euclidian metric
2. number of facilities –> one or many
   many –> service capacity, level of service, area covered
3. optimization criteria –> public or private sector

Question 5

single facility location using cross median approach

Answer 5

• to locate a single facility on a plane with minimized weight travel distance using metropolitan metric
• will find coordinate x and y

Question 6

weight

Answer 6

the amount of customer demand or population

Question 7

non-traditional location strategies for site selection

Answer 7

1. competitive clustering : form a cluster for customer comparison shopping
2. saturation marketing : stores under the same company locates near each other or at a particular location
3. marketing intermediaries : use marketing intermediaries to expand beyond geographic constraints
4. substitute electronic media for travel : telecommunication system
5. impact of the internet to site selection : virtual store for auction facilitator and pure e-commerce firms as well as alternative channel of distribution for click-and-mortar retailers
6. separation of front and back offices
   - a few services doesn’t need co-location for front and back offices
   - viewing location decisions from internal (employees) and external (customers) viewpoints highlights the opportunities of achieving economies of scale