Page 9 - Facility Management Module

FACILITIES LOCATION

CHAPTER 2: FACILITIES LOCATION

INTRODUCTION

The facilities location problem is an important strategic level decision-making for an
organization. One of the key features of a conversion process (manufacturing systems) is

the efficiency with which the product (services) is transferred to the customers. This fact will
include the determination of where to place the plant or facility. The location that, in
consideration of all factors affecting products delivered-to-customers cost of product(s) to be
manufactured, will afford the enterprise the greatest advantages obtained by virtue of

location.

The plant location should be based on the company’s expansion plan and policy,
diversification plan for the products, changing market conditions, the changing sources of
raw materials and many other factors that influence the choice of the location decision. The

purpose of the location study is to find an optimum location one that will result in the greatest
advantage to the organization.

LEARNING OBJECTIVE

At the end of this chapter, students are able to :

1. Identify suitable location for facilities planning
2. Determine the factor of choosing location
3. Used the quantitative facilities planning models to solve various facilities planning
problems.

2.1 Requirement for Selecting a Suitable Location

The requirement for selecting a suitable location arises because of two situations:
a. When starting a new factory
b. In case of existing factory

The existing firms will seek new locations in order to expand the capacity or to place
the existing facilities. The increase in demand for the company’s products can give rise to
following decisions:

a. Whether to expand the existing capacity and facilities
b. Whether to look for new locations additional facilities.
c. Whether to close down existing facilities to take advantage of some new
location

BPLK 1 SUBJECT CODE