Facility Location

ANALYZING RETAILING AND OTHER SERVICE LOCATIONS Retailing and other service organizations typically perform empirically based studies of alternative facility locations. Facilities such as retailing, customer services for profit, and health and emergency services are types of facilities that attempt to locate near their customers/constituents. The table below shows the steps in these studies:

Steps in Analyzing Service Facilities Location Decisions: 1. Customer behavior research : Why do customer buy our products and services? 2. Market research : Who are our customers, and what are their characterstics? 3. Data gathering for each location alternative : Where are concentration of target customers?

4. Revenue projections for each location alternative : What are the relevant economic projections, discretionary spending projections, competition activity, and timephased location revenue? 5. Profit projections for each location alternative : What are the projected revenues less time-phased operating costs?

When a company is deciding where to locate multiple facilities, more sophisticated analytical techniques are often used. These include :  Linear programming  Computer simulation  Network Analysis and others.

Integrating Quantitative and Qualitative Factors into Location Decisions: In many cases qualitative factors can be dominant when compared to quantitative ones. Some of these qualitative factors are :  Housing  Cost of living  Availability of labour

Integrating Quantitative and Qualitative Factors into Location Decisions: Climate  Community activities  Education and Health Services  Local Transportation Systems  Union activities  Proximity of similar industrial facilities 

Integrating Quantitative and Qualitative Factors into Location Decisions: These factors all work together with Quantitative Factors such as annual operations costs to determine the acceptability of a particular location, transportation cost, labour cost and availability, material cost and availability and utilities cost.