Location

1
Location
Chapter 10
2
Reasons for Globalization

• Improved transportation and communication
  technologies
• Loosened regulations on financial institutions
• Increased demand for imported services and goods
• Reduced import quotas and other international
  trade barriers

3
Managing Global Operations

• Other Languages
• Different Norms and Customs
• Workforce Management
• Unfamiliar Laws and Regulations
• Unexpected Cost Mix

4
Location Decisions - Manufacturing

• Favorable Labor Climate
• Proximity to Markets
• Quality of Life
• Proximity to Suppliers
• Proximity to Parent Company
• Utilities, Taxes, and Real Estate Costs

5
Location Decisions - Services

• Proximity to Customers
• Transportation Costs and Proximity to Markets
• Location of Competitors
• Site-Specific Factors

6
Location
Health-Watch
North
Location Factor Weight Score Total patient
miles per month 25 4 Facility utilization 20 3 Ave
rage time per emergency trip 20 3 Expressway
accessibility 15 4 Land and construction
costs 10 1 Employee preference 10 5
Example 10.1
7
LocationCenter of Gravity Approach
Example 10.2
8
Location
Break-Even Analysis
Fixed Costs Variable Costs Total
Costs Community per Year per Unit (Fixed
Variable) A 150,000 62 B 300,000 38 C 500
,000 24 D 600,000 30
Example 10.3
9
Location
Break-Even Analysis
Figure 10.2