![]() ![]() The choice of facility location is strategically guided by profit maximization or minimization of all costs associated with the choice of location.įacility location is connected with capacity decisions. Facility location decision is made by selecting the best option among a set of possible sites depending on the nature or type of business. It is thus a classical optimization problem for determining the sites for factories, service outlets and warehouses. The location decision should be made with great care, as any error that results in a poor location can be a constant source of higher costs, higher investment, difficult marketing and transportation, dissatisfied and frustrated employees and consumers, frequent interruptions of production, abnormal wastages, delays, and substandard quality, among other things.įacility location significantly impacts on revenue, costs, and service levels to customers. Poor Location decision not only affects the growth of the firm but impedes on the growth and development of the nation. Without good and thorough site planning from the start, the new facilities may have ongoing operational issues in the future. Location decisions are strategic in character, long-term in nature, and non-repetitive in nature. ![]() Facility Location is an important factor in the supply chain that significantly impacts on the efficiency and effectiveness of many supply networks and the organization at large. ![]()
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