Case Of Location Choice For Existing Organisation Business Essay

Case Of Location Choice For Existing Organisation Business Essay for an organisation. One of the key features of a conversion process manufacturing system is the efficiency with which the products services are transferred to the customers.This fact will include the determination of where to place the plant or facility.The selection of location is a key-decision as large investment is made in building plant and machinery. It is not advisable or not possible to change the location very often. So an improper location of plant may lead to waste of all the investments made in building and machinery, equipment. Before a location for a plant is selected, long range forecasts should be made anticipating future needs of the company. 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 locati on one that will result in the greatest advantage to the organization. The need for selecting a suitable location arises because of three situations. When starting a new organisation, i.e., location choice for the first time. In case of existing organisation. In case of Global Location. In Case of Location Choice for the First Time or New Organisations Cost economies are always important while selecting a location for the first time, but should keep in mind the cost of long-term business/organisational objectives. The following are the factors to be considered while selecting the location for the new organisations: Identification of region: The organisational objectives along with the various long-term considerations about marketing, technology, internal organisational strengths and weaknesses, region specific resources and business environment, legal-governmental environment, social environment and geographical environment suggest a suitable region for locating the operations facil ity. Choice of a site within a region: Once the suitable region is identified, the next step is choosing the best site from an available set. Choice of a site is less dependent on the organisation’s long-term strategies. Evaluation of alternative sites for their tangible and intangible costs will resolve facilities-location problem. The problem of location of a site within the region can be approached with the following cost-oriented non-interactive model, i.e., dimensional analysis. Dimensional analysis: If all the costs were tangible and quantifiable, the comparison and selection of a site is easy. The location with the least cost is selected. In most of the cases intangible costs which are expressed in relative terms than in absolute terms. Their relative merits and demerits of sites can also be compared easily. Since both tangible and intangible costs need to be considered for a selection of a site, dimensional analysis is used. In Case of Location Choice for Existing Org anisation In this case a manufacturing plant has to fit into a multi-plant operations strategy. That is, additional plant location in the same premises and elsewhere under following circumstances: Plant manufacturing distinct products. Manufacturing plant supplying to specific market area.