Facility location planning
Facility location or plant location planning may be defined as the function of determining where the plant should be located for maximum operating economy and effectiveness.
The basic purpose of the facilities location planning is to make product competitive by reducing cost of production and maximum utilization of resources to increase profit.
STEPS INVOLVED IN FACILITY LOCATION PLANNING
- Create list of alternative location options for the facility
- Identify the factors relevant to the facility being planned
- Select Better location option using various techniques (Factor Rating / Break Even Analysis)
- Find out location with least transportation cost using various techniques (Simple Median Model / Center of Gravity Model / Transportation Model)
- Select best location