Production and Operations Management: Manufacturing and Services

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Presentation transcript:

Production and Operations Management: Manufacturing and Services Eighth Edition Production and Operations Management: Manufacturing and Services Ó 1997 Irwin/McGraw-Hill, A Division of the McGraw-Hill Companies PowerPoint Supplement developed by: William E. Youngdahl World Business Department Thunderbird, The American Graduate School of International Management PowerPoint Presentation for Chapter 9 Facility Location Chase Aquilano Jacobs Irwin/McGraw-Hill The McGraw-Hill Companies, Inc., 1998 1

Competitive Imperatives Impacting Location The need to produce close to the customer due to time-based competition, trade agreements, and shipping costs. The need to locate near the appropriate labor pool to take advantage of low wage costs and/or high technical skills. 3 3

Issues in Facility Location Proximity to Customers Business Climate Total Costs 4 4

Issues in Facility Location Infrastructure Quality of Labor Suppliers 5 5

Issues in Facility Location Other Facilities Free Trade Zones Political Risk 6 6

Issues in Facility Location Government Barriers Trading Blocs Environmental Regulation 7 7

Issues in Facility Location Host Community Competitive Advantage 8 8

Facility Location Center of gravity method example Several automobile showrooms are located according to the following grid which represents coordinate locations for each showroom. X Y A (100,200) D (250,580) Q (790,900) (0,0) Determine the best location for a Z-Mobile warehouse/temporary storage facility considering only distances and quantities sold per month 11 11

Determining the Coordinates X Y A (100,200) D (250,580) Q (790,900) (0,0) Cx = X coordinate of center of gravity Cy = X coordinate of center of gravity dix = X coordinate of the ith location diy = Y coordinate of the ith location Vi = volume of goods moved to or from ith location 12 12

Determining the Coordinates X Y A (100,200) D (250,580) Q (790,900) (0,0) 13 13

Ardalan Heuristic (Example 9.3) (11)(10)(1.1) Step 1 16 16

Ardalan Heuristic: Selecting the First-Choice Location Choose the community with the lowest cost 17 17

Ardalan Heuristic: Selecting the Second-Choice Location Cost > Selected Site Cost? If yes, replace. Second Choice Replaced Not Replaced 18 18

Ardalan Heuristic: Selecting the Third-Choice Location 19 19

Ardalan Heuristic: And the least desirable alternative is 20 20

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