Explain the need for suitable location 17:55 | 1.4MB/s O70 ):Find..maximize gains. identiryıng an ideai Iocation is very cruciai, it snouid alwaysmaximize the net advantage, must minimize the unit cost of production anddistribution. Plant location decisions are very important because once the plant islocated at a particular site then the organization has to face the pros and cons of thatinitial decision (myventurepad, n.d.).Lesson 2. The Need for Selecting a Suitable Location(Kumar & Suresh, 2008)The need for selecting a suitable location arises because of three situations:I.When starting a new organizationII.In case of existing organizationI.In case of globalizationI.In case of Location Choice for the First Time or New OrganizationFactors to be considered:1. Identification of regionThe organizational objectives along with the various long-termconsiderations about marketing, technology, internal organizationalstrengths and weaknesses, region-specific resources and business26environment, legal-governmental environment, social environment andgeographical environment suggest a suitable region for locating theoperations facility.2. Choice of a site within a regionOnce the suitable region is identified, the next step ischoosing the best site from an available set. Choice of a site isless dependent on the organization's long-term strategies.Evaluation of alternative sites for their tangible and intangiblecosts will resolve facilities-location problem.3. Dimensional analysisSince both tangible and intangible costs need to beconsidered for a selection of a site, dimensional analysis isused. Dimensional analysis consists in computing the relativemerits (cost ratio) for each of the cost items for two alternativesites.The existing firms will seek new locations in order to expand thecapacity or to place the existing facilities. When the demand for productincreases, it will give rise to following decisions:Whether to expand the existing capacity and facilities;Whether to look for new locations for additional facilities:

Location planning is one of the important aspects for any organization or business unit in case of a…

Answered: Explain the need for suitable location

Business

Operations Management

Explain the need for suitable location

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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