1. PREPARED BY:
CADORNA, CAMILLE O.
CALAWOD, JANICA V.
BELA-ONG, MARY GRACE P.
SAWIT, ANDRIA V.

2. LOCATING FACILITIES- MEANING
IMPORTANCE OF LOCATION
LOCATION DECISION
CHOOSING THE GEOGRAPHIC REGION

3. - is the process of identifying the best
geographic location for the services or
production facilities of the firm.

6. Facilities Location
finds the best
geographic locations
for the different
elements in the
supply chain

7. Right Location
provides adequate
access to customers,
suppliers, skilled
labors, etc.

8. Right Location
ensures success of
the organization in
current global
environment.

10. starting new business
insufficient capacity
changes in technology
mergers
end of a lease on existing
premises
changes in location of
customers or suppliers

11. Efficiency and
effectiveness
Long-term commitment
Fixed cost
Revenues
Variable cost

13. CHOOSING GEOGRAPHIC REGION
Business
Strategy
Culture,
costs,
customers,
suppliers, etc
Local
Conditions
Available
Sites
Geographical
regions for
locations
Countries
and areas
Cities and
towns
Individual
Sites
HIERARCHY
OF DECISION
FOR
LOCATIONS

14. 1.National
2.Regional
3.Community
Considerations
4.Site-Related Factors
FACTORS AFFECTING LOCATION DECISION

15. 1. Location of raw materials
2. Location of markets
3. Labor Factors
4. Legal and Political Community
Considerations
5. Quality of Life
6. Services
7. Attitudes
REGIONAL FACTORS

16. FACTORS TO CONSIDER
8. Environmental Regulations
9. Utilities
10.Developer
11.Developer Support Site-Related
Factors
12.Land
13.Transportation
14.Environment
15.Legal

18. INFINITE
S E T A P P R O A C H
FEASIBLE
SET APPROACH

19. INFINITE
S E T A P P R O A C H
uses geometric arguments to find the
best location, assuming that there are
no restrictions on site availability.

20. FEASIBLE
SET APPROACH
where there are only small number of
feasible sites, and an organization has
to choose the best.

21. INFINITES E T A P P R O A C H

22. LOCATION FACTOR
RATING METHOD
INFINITE
S E T A P P R O A C H
- may be used when many sites
are available, and each site has
some appealing characteristics

23. INFINITE
S E T A P P R O A C H
CENTER-OF-GRAVITY
TECHNIQUE METHOD
-can be used when multiple
suppliers or customers bases exist
on different geographic locations
and it is economically sensible to
locate centrally to service all of
them.

24. INFINITE
S E T A P P R O A C H
THE EUCLIDEAN
MODEL
- concerned with the
selection of the best
location(s) for establishing
facilities based on cost or
other criteria

25. INFINITE
S E T A P P R O A C H
S I M P L E M E T H O D S
NEAR TO CUSTOMERS
C
C
C
S
S
S

26. INFINITE
S E T A P P R O A C H
S I M P L E M E T H O D S
NEAR TO SUPPLIERS
C
C
C
S
S
S

27. INFINITE
S E T A P P R O A C H
S I M P L E M E T H O D S
COMPROMISE POSITION
C
C
C
S
S
S

28. FEASIBLESET APPROACHES
- identify available
sites, compare them,
and find the best

29. TWO MODELS
• Costing model
• Scoring model

30. COSTING MODEL
- calculates the total cost of working from
each location and find the cheapest
total variable cost = operating cost
+ inward transport cost + outward
transport cost

31. SCORING MODEL
- emphasizes the factors that are important
for locations but which cannot easily put cost
or quantified
Region or Country
City or Area
Site

32. SCORING MODEL
5 STEPS
decide the relevant factors in a decision1
2
3
4
5
give each factor a maximum possible score
that shows its importance
consider each location in turn and give an
actual score for each factor, up to the
maximum
add the scores for each location and
find the highest Step
discuss the result and make a final
decision

33. 5. government policies
toward industries
4. closeness of suppliers and services
6. quality of infrastructure
3. environment and quality
of life for employees
1. availability of a workforce
with appropriate skills
2. labor relations and
community attitudes
Important Factors for
Manufacturing Business

34. 1. population density
3. location of competitors
4. location of other attractions
6. ease of access and
convenient parking
7. visibility of sites
5. convenience for passing traffic
and public transport
Important Factors for
Services
2. socio-economic
characteristics of the nearby
population

35. ALTERNATIVES IN
LOCATING FACILITIES
Licensing or franchising
Exporting
Local distribution and sales
Local assembly and finishing
Full local production
Network Models