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

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 12P

See similar textbooks

Similar questions

Lot sizing A producer with one product faces the following forecasted demand for the next 10 weeks: week 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 Requirement 30 12 72 11 24 42 35 30 75 68 Assume furthermore that the producer faces a Set-up cost (K) equal to 132 each time production takes place and storage costs (h) of 0.6 per unit per week. a) Find the cost of the two extreme strategies Lot - for - lot (produce exactly what is needed in each period) and Produce - once (produce everything needed in the first period).
Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.
S7.25 B Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.25 per 5-pound bag. They expect to sell the shredded lettuce for $2.50 per 5-pound bag. d) What is the revenue at the break-even quantity for the mechanized process? e) What is the monthly profit or loss of the manual process if…
Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.Draw a…
Q2) (a) A Missouri job shop has four departments--machining (M), dipping in a chemical bath (D), finishing (F), and plating (P)-assigned to four work areas. The operations manager, Mary Marrs, has gathered the following data for this job shop as it is currently laid out. It costs $0.50 to move 1 workpiece 1 foot in the job shop. Determine cost of material handling in the current layout. Further, suggest a revised layout that has the lowest material handling cost. 100s of Workpieces Moved Between Work Areas Distances Between Work Areas in Feet M D F P M D F P M 18 2 20 12 8 4 2 6. 10 F 18 4
S7.25 C Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.25 per 5-pound bag. They expect to sell the shredded lettuce for $2.50 per 5-pound bag. g) At what quantity would Zan and Angela be indifferent to the process selected? h) Over what range of demand would the manual process be…
not certain how to calculate because it says each item sells for 17,000. also, I wouldnt be sure which numbers to graph with 1. A small producer of machine tools wants to move to a larger building, and has identified twoalternatives. Location A has annual fixed costs of $800,000 and variable costs of $14,000 perunit; location B has annual fixed costs of $920,000 and variable costs of $13,000 per unit1.The finished items sell for $17,000 each.A) State the total-cost formula:B) Calculate a second point for each location: Set a selected quantity = ____ Use q=150 units C) Sketch the total-cost lines for the locations on a single graph.
b) A factory is going to modify of a plant layout to install four new machines M₁, M2, M3 and M4. There are 5 vacant places J, K, L, M and N available. Because of limited space machine M₂ cannot be placed at L and M3 cannot be placed at J. The cost of locating machine to place in Shillings is shown below: M₁ M₂ M3 M4 J Kshs '000' 24 28 K Kshs '000' 18 18 22 16 L Kshs '000' 22 28 24 M Kshs '000' 30 20 22 14 N Kshs '000' 22 18 14 16 Required: Determine the optimal assignment schedule in such a manner that the total costs are kept at a minimum.
Production and sales estimates for March for Robin Co. are as follows: Estimated inventory (units), March 1 18,000 Desired inventory (units), March 31 21,600 Expected sales volume (units): Territory M 7,000 Territory L 8,000 Territory O 9,000 Unit sales price P15 The number of units expected to be manufactured in March is _______________________________________________ Show solution.
Variable cells Cell Name Final Value Reduced Cost Objective Coefficient Allowable Increase Allowable Decrease $B$6 Activity 1 3 0 30 23 17 $C$6 Activity 2 6 0 40 50 10 $D$6 Activity 3 0 –7 20 7 1E+30 Constraints Cell Name Final Value Shadow Price Constraint R.H. Side Allowable Increase Allowable Decrease $E$2 Resource A 20 7.78 20 10 12.5 $E$3 Resource B 30 6 30 50 10 $E$4 Resource C 18 0 40 1E+30 22 What is the optimal objective function value for this problem?
Variable cells Cell Name Final Value Reduced Cost Objective Coefficient Allowable Increase Allowable Decrease $B$6 Activity 1 3 0 30 23 17 $C$6 Activity 2 6 0 40 50 10 $D$6 Activity 3 0 –7 20 7 1E+30 Constraints Cell Name Final Value Shadow Price Constraint R.H. Side Allowable Increase Allowable Decrease $E$2 Resource A 20 7.78 20 10 12.5 $E$3 Resource B 30 6 30 50 10 $E$4 Resource C 18 0 40 1E+30 22 If the right-hand side of Resource B changes to 10, then the objective function value: Multiple Choice will decrease by $120. will decrease by $60. will decrease by $20. will remain the same. can only be discovered by resolving the problem.
Variable cells Cell Name Final Value Reduced Cost Objective Coefficient Allowable Increase Allowable Decrease $B$6 Activity 1 3 0 30 23 17 $C$6 Activity 2 6 0 40 50 10 $D$6 Activity 3 0 –7 20 7 1E+30 Constraints Cell Name Final Value Shadow Price Constraint R.H. Side Allowable Increase Allowable Decrease $E$2 Resource A 20 7.78 20 10 12.5 $E$3 Resource B 30 6 30 50 10 $E$4 Resource C 18 0 40 1E+30 22 If the right-hand side of Resource A changes to 10, then the objective function value: Multiple Choice will decrease by $12.50. will decrease by $125. will decrease by $77.80. will remain the same. can only be discovered by resolving the problem.

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

SEE MORE TEXTBOOKS