3 Primary Kinds of P/OM’s Contributions to

Facilities Management
1. P/OM’s experience, with what succeeds and what fails for facilities
planning, adds valuable insights into the planning team.
 
2. P/OM knows how to use facilities planning models developed by
operations researchers, management scientists, and location analysts.
 
3. The input of international partners who understand the real estate issues
as well as the governmental regulations.
Location Decision Models
• It can use measures of costs and preferences to reach location
decisions.

These models include:

 Transportation Models (TMs)
 Scoring Models Use Combinations of Costs and Preferences
 Breakeven Analysis
 Center of Gravity Model
 Plant Layout Models for Flow Shops and Job Shop
Transportation Models (TMs)
• It is a special class of linear programming in which the main
objective is to transport a product from various sources to various
destinations at total minimum cost.

Scoring Models Use Combinations of Costs and

Preferences
• It allows governance teams to rank potential projects based on
criteria such as risk level, cost, and potential financial returns.

Breakeven Analysis
• It is a financial calculation for determining the number of products
or services a company should sell or provide to cover its costs.
Center of Gravity Model
• It is defined to be the location that minimizes the weighted
distance between the warehouse and its supply and distribution
points, where the distance is weighted by the number of tones
supplied or consumed.

Plant Layout Models

• It is a plan of an optimum arrangement of facilities including
personnel, operating equipment, storage space, material handling
equipment and all other supporting services along with the design
of best structure.
- Flow Shops
- Job Shop
Location Decisions Qualitative Factors

• Best location is related to the function of the facility and the

characteristics of its products and services.

• Location decisions always are made relative to what other alternatives

exist just as building decisions are made relative to what else is
available.
Location to Enhance Service Contact

• Service industries locate close to their customers to achieve the kind of contact
that characterizes good service.

• Facilities planning and management are crucial to success in the hotel and resort
business. Services, in general, are strongly affected by location, structure, site,
equipment, and layout because they all participate in making contact with
customers successful.

• Government institutions locate services close to the citizens who need them.
Municipal governments provide police and fire protection to those who live
within the municipality and pay the taxes.
Just-in-Time Orientation

• Extractors like to be close to their raw materials.

• Fabricators like to be close to their raw materials and customers, but

that cannot always be the setup.

• Assembly plants try to keep their component suppliers close-by.

Location Factors

Six factors that can affect location decisions are:

1. Process inputs. Closeness to sources is often important.

2. Process outputs. Being close to customers can provide competitive
advantages.
3. Process requirements. There can be needs for special resources that are not
available in all locations.
4. Personal preferences. Location decision makers including top
management.
5. Governmental issues. Tax, tariff, trade, and legal factors usually matter.
6. Site and plant availabilities. The interaction between the location and the
available facilities.