MG 211 Lecture Notes - Lecture 8: Geographic Information System
Document Summary
Options include: expanding an existing facility instead of moving, maintaining current sites while adding another facility elsewhere, closing the existing facility and moving to another location. Objective: maximize the benefit of location to the firm. Labor productivity: management may be attracted by an area"s low wage rate: = labor cost per day / production in units per day. Exchange rates and currency risk: relocate or export to a foreign country. Costs: tangible (readily identifiable costs that can be measured with some precision), intangible (cannot be easily quantified, such as quality of life and government). Proximity to suppliers: concerns: perishability, transportation costs, bulk. Proximity to competitors: clustering (location of competing companies near each oother, bc of critical mass of info/talent/vc/natural resources). Center-of-gravity method (finding the best location for a single distribution point that services several stores or areas): place locations on a coordinate plane.
