Factors That Affect Methods of Evaluating

Location Decisions
LOCATION STRATEGIES Location Alternatives

1.Labor Productivity The Factor-rating method

A location method that instills objectivity into the
process of identifying hard-to-evaluate costs
Locational cost–volume analysis
2. Exchange Rates and Currency Risk A method of making an economic comparison of
Operational hedging location alternatives
3. Cost Geographic Information Service Location Center-of-gravity method
Tangible costs Systems Strategy A mathematical technique used for finding the best
Intangible costs location for a single distribution point that services
4. Political Risk, Values, and Culture several stores or areas
A system that stores and displays information that
5. Proximity to Markets can be linked to a geographic location analysis is on minimizing cost, the focus in the Transportation model
6. Proximity to Suppliers service sector is on maximizing revenue. A technique for solving a class of linear programming
perishability Some of the geographic databases available in many GISs: the location focus for service firms should be on problems.
transportation costs Census data by block, tract, city, county, congressional determining the volume of customers and revenue.
bulk district, metropolitan area, state, and zip code
7.Proximity to Competitors (Clustering) Maps of every street, highway, bridge, and tunnel in the U.S.
Utilities such as electrical, water, and gas lines
All rivers, mountains, lakes, and forests
All major airports, colleges, and hospitals

TRANSPORTATION DEVELOPING AN INITIAL THE STEPPING-STONE SPECIAL ISSUES IN

MODELING SOLUTION METHOD MODELING

Demand Not Equal to Supply

An iterative procedure for solving problems that
involves minimizing the cost of shipping
products from
a series of sources to a series of destinations.
To use the transportation model, we need to
know the following:
1. The origin points and the capacity or supply
per period at each.
2. The destination points and the demand per
period at each.
3. The cost of shipping one unit from each
origin to each destination.
Northwest-corner rule
A procedure in the transportation model
where one starts at the upper-left-hand cell
of a table (the northwest corner) and
systematically allocates units to shipping
routes.
The Intuitive Lowest-cost Method
A cost-based approach to finding an initial
solution to a transportation problem.
raras puspita w.u
(20/454863/EK/22827)
Stepping-stone method
A common situation in real-world
An iterative technique for moving
problems is the case in which total
from an initial feasible solution to
demand is not equal to total supply.
an optimal solution in the transportation
method
Degeneracy
An occurrence in transportation models
in which too few squares or shipping
routes are being used, so that tracing a
closed path for each unused square
becomes impossible.
 TYPES OF LAYOUT WAREHOUSE AND STORAGE
LAYOUT

1. Office layout
2. Retail layout
Good layout requires determining
the following:
LAYOUT STRATEGIES A design that attempts to minimize total
1. Material-handling equipment cost by addressing trade-offs between
3. Warehouse layout
2. Capacity and space space and material handling
4. Fixed-position layout
requirements

5. Process-oriented layout
3. Environment and aesthetics Cross-docking
6. Work-cell layout
4. Flows of information Avoiding the placement of materials or
7. Product-oriented layout:
5. Cost of moving between supplies in storage by processing them
various work areas as they are received for shipment.
Random stocking
OFFICE LAYOUT RETAIL LAYOUT Used in warehousing to locate stock
wherever there is an open location
Customizing
The grouping of workers, their equipment, and Using warehousing to add value to a
An approach that addresses flow, allocates
spaces/offices to provide for comfort, safety, and product through component
space, and responds to customer behavior.
FIXED-POSITION LAYOUT movement of information
Objective of retail layout is to maximize modification, repair, labeling, and
Workspace can inspire informal and productive profitability per square foot of floor space packaging
encounters if it balances three physical and

Servicescapes
A system that addresses the social aspects:

1. Ambient conditions
layout requirements of stationary 1. Proximity 2. Spatial layout and functionality
projects 2. Privacy 3. Signs, symbols, and artifacts
3. Permission
Focused Facilities

takt time is the total work time available divided by

Process-Oriented LAYOUT units required to satisfy customer demand

A layout that deals with low-volume, high-
variety production in which like machines
and equipment are grouped together.
on making a single product or family of related products
Source : Heizer, J. , B. Render, and C. Munson.
2020. Operations Management. 13rd Ed. Upper
Saddle River, New Jersey: Prentice Hall.
Repetitive and Product-
Oriented Layout Takt time = Total work time available / Units required to
satisfy customer demand
Product-oriented layouts are organized around products or families of similar Work cell
high-volume, low-variety products. An arrangement of machines and personnel that focuses
Two types of a product-oriented layout are fabrication and assembly lines : with similar routings.
1. Fabrication line : A machine-paced, product-oriented facility for building components. Focused Work Center
2. Assembly line : An approach that puts fabricated parts together at a series of moves production to a large cellular work center that
workstations; used in repetitive processes. remains part of the present facility
Focused Factory
Assembly-Line Balancing : Line balancing is usually undertaken to minimize imbalance A plant established to focus the entire manufacturing
between machines or personnel while meeting a required output from the line system on a limited set of products defined by the
company’s competitive strategy