Summary
Samenvatting External Environment Chapter 8
- Course
- Institution
Summary of chapter 8: Facility Location Thaught at Rotterdam Business School, International Business, 1st year. Course: Operations & Supply Chain Management.
[Show more]
Seller
Follow
noordzij39
Reviews received
Content preview
Chapter 8: Facility LocationFacility location refers to choosing the locations for distribution centers, warehouses, and
production facilities to facilitate logistical effectiveness and efficiency.
There are several overarching factors that can influence facility location decisions:
- Cost Considerations arise because many consumers have become sensitized to buy
products only when prices are low, due in part to lingering effects from the
recession1.
some organizations have adopted nearsourcing, in which companies reconfigure
their logistics networks to bring some production facilities closer to key consumer
markets.
- Customer Service Expectations, they increase over time.
- Location of Customer or Supply Markets; improvements in transport and technology
allow consumers to migrate relatively easily from one region or country to another.
economic growth is another variable that influences the location of customer
markets; organizations sometimes expand their geographic scope to serve more
customers.
- The sustainability concept; a key sustainability issue involves the sourcing of products
and an emerging concept involves a locavore strategy, that is, purchasing locally
grown or produced foods.
For materials that lose no weight in processing, known as pure materials, the processing
point can be anywhere near the raw material source and the market.
If materials lose considerable weight in processing, known as weight-losing products, then
the processing point should be near the point where they are mined or harvested, largely to
avoid the payment of unnecessary transportation charges.
If the raw materials gain weight in processing, known as weight-gaining products, then the
processing point should be close to the market.
The wage difference partly explains the popularity of the maquiladora plants, assembly
plants that provided much needed jobs for Mexicans in the mid-1960s.
Countries with low-cost labor may be house a multitude of sweatshops, which can be viewed
as organizations that exploit workers and that do not comply with fiscal and legal obligations
toward employees.
Right-to-work laws mean that an individual cannot be compelled to join a union as a
condition of employment (US).
Employees who are sent to other countries for extended periods of time are known as
expatriate workers.
Of particular interest to logisticians and supply chain managers is the inventory tax,
analogous to personal property taxes paid by individuals.
Transportation availability refers to the number of transportation modes (intermodal
competition) as well as the number of carriers within each mode (intramodal competition)
that could serve a proposed facility.
When looking at facility location considerations, early business logistics textbooks discussed
the agglomeration concept, which “refers to the net advantages which can be gained by a
sharing of common locations by various enterprises”.
although agglomeration continues to be a key factor in facility location, it is better
known today as the industry cluster concept.
1
The recession from 2007-2009
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller noordzij39. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.52. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78767 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now