ESSAY:  (10 points each)

1. Explain the factors to be considered while selecting the

location for the new organization.

 Identification of region – In identifying the region, we do

not choose whatever region we want. We cannot choose one
region just because we see other businesses booming in that
region. We have to consider this with our long-term strategies
like marketing, business environment, political situations,
geographical strengths and weaknesses, supply of resources
and other considerations. After looking further into these, we
can see if the region satisfies our organization’s demands and
choose the best region for our business.

 Choice of a site within a region – After identifying the

region, the best site will be chosen among the available set.
Tangible reasons like costs of operations and intangible
reasons like customer-related issues, technology and other
strategic reasons may be used to identify which site will best
benefit the organization.

 Dimensional analysis – This is a method of making an

integrated comparison of alternative sites on the basis of both
tangible and intangible cost. A cost ratio is computed and if
that value is greater than 1, then site N is superior and vice
versa.

2. Explain different operations strategies in case of

location choice for existing organisation.  (give at
least 2 organizations)

 Plant manufacturing distinct products. – Distinct

products require different processes. If the organization
specializes different products, they should not combine the
process of producing product A and B, for example. If both
products are produced together in the same facility, there
might be a chance that the production of product A might
affect product B and vice versa. This might also lead to
 confusion among the employees and production policies. For
this situation, it is best if the organization will separate the
production of products that contradicts the process of the
other.

 Manufacturing plant supplying to specific market

area. – This is a strategy where almost all the products are
manufactured in each plant. This is used in producing
products that usually have identical production process like
beverages or soft drinks. Since the resources and technology
used are almost the same, it would be more practical to
produce it on a single plant and doing so will enable the
company to deliver the goods within the specific area faster
and easier.

 Plant divided on the basis of the process or stages in

manufacturing. – In this strategy, there are different plant
for every production stage. This is used by companies who
produce products that requires different equipment, labor
skills or technologies in each production stage.

 Plants emphasizing flexibility. – This strategy

emphasizes coordination between plants in order to meet the
changing needs of the market while using the facilities
efficiently. The focus of this strategy is to maintain efficient
operations for a long period of time rather than on short-term
basis.

Organizations like San Miguel Corporation uses the first strategy

where they have various manufacturing plant for the various products
that they offer in the market. Monde Nissin Corporation’s Lucky Me!
Noodle Factory in Sta. Rosa, Laguna and Coca-Cola Beverages
Philippines, Inc. in Imus, Sta. Rosa, General Trias and other locations,
on the other hand, uses the second strategy since most of their
products like noodles and soft drinks, respectively, are identical and
are located in a specific area for easier deliveries and transportation.

3. Explain the objectives of plant layout. 

The objectives of plant layout are:
1. Streamline the flow of materials through the plant.
 Plant layout aims to ease the flow of materials from one
station or stage to another so that there won’t be confusion
as to which material should go into the process or not.
2. Facilitate the manufacturing process.
 Using an effective plant layout means that the equipment,
machines and other necessary materials in production are
arranged strategically which makes the production process
easier.
3. Maintain high turnover of in-process inventory.
 Since the materials are moving smoothly and the
machineries are arranged strategically, the delays in
production are reduced resulting to high inventory
turnover.
4. Minimise materials handling and cost.
 Handling costs like movement. storage, protection and
control are also reduced as the plant layout permits smooth
flow of materials throughout the production and it also
provides a better plan on how to handle the materials that
are not being processed yet. This reduces the costs in
covering breakage or spoilage of inventories.
5. Effective utilisation of men, equipment and space.
 Plant layout not only focuses on materials and machineries
but also to manpower and space. This helps in reducing the
foot traffic and ensures that there is enough space for them
to move around.
6. Make effective utilisation of cubic space.
 This does not mean that every space should have something
in it or that there should be a lot of free space. There should
be a balance between them and this means that the space
should be utilized effectively to serve the purpose of the
manufacturing plant.
7. Flexibility of manufacturing operations and arrangements.
  The plant layout aims to achieve flexibility which means
that the operations and arrangement should be able to
respond effectively in changing circumstances like changes
in volume.
8. Provide for employee convenience, safety and comfort.
 Plant layout also aims to eliminate hazards and risks within
the workplace so that the employees can work in a safe and
comfortable environment.
9. Minimize investment in equipment.
 Since plant layout aims to effectively utilize equipment,
investment in equipment are also reduced by minimizing
related costs like replacement costs and maintenance costs.
10. Minimize overall production time.
 Production time is reduced as the materials flow smoothly
and faster from one stage to another and it is ensured that
the equipment and machineries are performing at its
optimum capacity.
11. Maintain flexibility of arrangement and operation.
 Changing demands and situations are inevitable and plant
layout should be able to adapt to it so that whenever the
situation calls for it, the whole operation can adjust to it.
12. Facilitate the organizational structure.
 A plant layout can provide easier flow of people and make
the organizational structure easier to understand and
identify so that there can be clarity and guidance on specific
human resources.