plan
a.Question 1
A plan that is made to the optimal location by recognizing the company’s objectives and needs is known as a location decision. The location decision depends on the company as some make the decision frequently while others prefer occasionally.
Some of the organizations that decide daily are EN company, WM franchise store, and MD hamburger restaurant. They are based on franchise operations and adds new business units per year hence daily location decisions. These organizations prefer structured and routine location decisions.
Question 2
- Labor productivity- Labor productivity may differ from country to country; therefore, before deciding on the location, the management should put the productivity into consideration as it estimates the labor hours used in the production.
- Foreign exchange- During money exchange to foreign countries, unfavorable exchange rates may arise, which disadvantage firms in savings.
- Culture- Cultural variation of countries, employees, or suppliers affect a company’s productivity and delivery schedule.
- Proximity to markets- Due to expenses in transporting finished goods, proximity to markets helps the company be closer to the customers.
Question 3
To help minimize distribution costs, a technique is usually used for planning location for distribution center known as Center-of -gravity.
Market location, the volume of goods to be shipped, and shipping cost for the distribution center are considered for planning the location.
Center-of-gravity has an assumption that ‘Cost is proportionate directly to both distance and volume of goods shipped.’
Service facility assumes that ‘Revenue is directly proportional to proximity to markets.’
- Question 1
Locational break-even analysis is a scheme used in production management and is done by analyzing and balancing variable and fixed costs to the sales level.
Steps-
- Determining the variable and fixed cost for each location.
- On the vertical axis of the graph plot, the costs and annual sales on the horizontal axis.
- Select the location with the lowest total cost.
Question 2.
Manufactures locate weight loss during mining and refining.
Example- shipping after the processing process. During processing, the issue of weight or volume of gain or loss supports the process. When suppliers are grouped near the customer, delivery time is easily accomplished.
E-Shopping is an example of no close contact where services can occur at huge distances.
Question 3
During location selecting, not only does low wage rates be considered, but also productivity is important to be put into consideration. Unskilled labor, low education levels, or fewer work ethics are not good for business performance.