Location of Operations

After deciding overall shape of network an organization must decide the location of each operation.  Location is geographical positioning of operation relative ( متصل ب ) to input resources, other operations or customers with which it interacts ( تتفاعل ).

 Location has impact ( تأثير ) on profit.  In retailing ( تجارة التجزئة ) even difference of few ( قليل ) meters can make difference between profit and loss.  Other operations like fire service, hospital, warehouse ( مستودع ), and factory require careful ( دقيق ) consideration ( نظر ) of location to ensure ( ضمان ): ◦ Reduction ( تخفيض ) in travel time, ◦ cost savings, and ◦ Availability ( أفيلابيلتي ) of labor

The Operation Supply-side factors which vary to influence costs as location varies. For example: labour costs land costs energy costs Transportation (نقل) costs community factors Demand-side factors Which vary to influence customer service/ revenue as location varies. For example: labour skills Suitability ( ملاءمة ) of site Image Convenience (ملاءمة) for customers

 Supply-side influences ( التأثيرات )  Supply side costs are labour which varies across the globe, similarly land, energy and transport costs vary in different geographical locations.  Community factors refer to local tax ( ضريبة ), government financial policies, political stability, local people attitude, and taxation and language barriers

 Demand –side Influences  Demand side influences refer to ◦ ability of local labour force to respond to customer reaction, ◦ suitability of site for example location of holiday resort next to beach, ◦ image of location and convenience for customers.

 Organizations need to decide on the size of each of their operations. ◦ Costs, ◦ capacity balancing, ◦ timing and ◦ break-even analyses are core issues which organizations have to tackle in deciding capacity of their operations.  The strategies which organizations can use to deal with long-term capacity management issues are

 The strategies which organizations can use to deal with long-term capacity management issues are: ◦ Capacity-Leading ( قيادة ) strategies ◦ Capacity –Lagging ( متخلف ) Strategies ◦ Smoothing ( تمهيد )with Inventory ( جرد )

 According to this strategy organizations can always plan sufficient capacity to meet demand in order to maximize revenue and customer satisfaction.  Advantages ( المزايا ): This strategy helps to have extra capacity to absorb extra demand and avoid start-up problems if new plants are to be installed to meet extra demands.  Disadvantages ( عيوب ) of this strategy are underutilization of plant capacity if demand turns out to be low, high fixed costs and high capital expenditure at early stages.

 According to this strategy organizations always plan the size of their operations by ensuring that there is sufficient demand to keep the plants working at full capacity. This in turn minimizes the unit cost, minimizes over-capacity problems and capital spending is delayed.  Disadvantages are ◦ insufficient capacity to meet demand and ◦ reduction in revenue, ◦ inability to take advantage of short-term increases in demand and ◦ threat of under-supply if there are problems with start- up of new plants.

 Inventory is the level of stock which any operation produces. Capacity is planned in a way that the demand is always met by combination of production and inventories. This usually ensures full utilisation of capacity and reduction in cost.  Disadvantage could be cost of carrying high inventories and high working capital requirements.

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