Operations Management Assignment (Location Strategy) PDF

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Assignment: Location Strategy

1. Essay Advantages and Disadvantages of Qualitative Approach to Location Decision Making

Location decision is one of the crucial strategic decisions in operations management as the location of a business or operation determines the long term profitability and sustainability of a business. Location decision making is vital as it directly influences transportation and distribution costs for a business and hence, it’s overall financial health. That gives the reason why searching for the right location is necessary before the business start to operate. This research includes qualitative approach and quantitative approach. Either of the two approaches is used in collecting information that will help to come up with the right decision making. But qualitative approach is mostly used in many research. It is likely because a qualitative approach, based on observation notes was carried out. Meaning, it seeks to tell the story of a particular group's experiences in their own words, and is therefore focused on narrative. In which, facts are already stated. For the quantitative approach, a questionnaire was handed to the participants, in order to get feedback about automatic assessment tool. Further, with the aim to evaluate if the learning outcomes of the simulation sessions where reached, a theoretical test was imparted before and after the sessions in order to compare the results and observed if there was any improvement. The team should take a lot of time to do a quantitative research. Also, there are some benefits of using qualitative research approaches and methods. One, is that qualitative research approach produces the thick description of participants’ feelings, opinions, and experiences, and interprets the meanings of their actions. This would give accurate information that is reliable to what the researcher is up to know. To explain briefly, Qualitative decision is more subjective not just based on the numerical statistical data but other associated factors that may have some or major influence on the collected data. It is a more in-depth analysis of all possible factors that can affect the decision making process.

2. Why shouldn’t a low wage rates alone be sufficient to select a location? In my personal opinion, it really depends on what you are manufacturing. A cheaper wage rate may not compensate the high shipping/customs costs you must pay to send your product to the area where demand is high. Also, low wage workers may be much less productive. Finally, there may be government regulations that counter this advantage. 3. Formulating a location strategy typically involves the following: 1. Facilities. Facilities planning involves determining what kind of space a company will need given its short-term and long-term goals. 2. Feasibility. Feasibility analysis is an assessment of the different operating costs and other factors associated with different locations.

3. Logistics. Logistics evaluation is the appraisal of the transportation options and costs for the prospective manufacturing and warehousing facilities. 4. Labor. Labor analysis determines whether prospective locations can meet a company's labor needs given its short-term and long-term goals. 5. Community and site. Community and site evaluation involves examining whether a company and a prospective community and site will be compatible in the long-term. 6. Trade zones. Companies may want to consider the benefits offered by free-trade zones, which are closed facilities monitored by customs services where goods can be brought without the usual customs requirements. The United States has about 170 free-trade zones and other countries have them as well. 7. Political risk. Companies considering expanding into other countries must take political risk into consideration when developing a location strategy. Since some countries have unstable political environments, companies must be prepared for upheaval and turmoil if they plan long-term operations in such countries. 8. Governmental regulation. Companies also may face government barriers and heavy restrictions and regulation if they intend to expand into other countries. Therefore, companies must examine governmental—as well as cultural—obstacles in other countries when developing location strategies. 9. Environmental regulation. Companies should consider the various environmental regulations that might affect their operations in different locations. Environmental regulation also may have an impact on the relationship between a company and the community around a prospective location. 10. Incentives. Incentive negotiation is the process by which a company and a community negotiate property and any benefits the company will receive, such as tax breaks. Incentives may place a significant role in a company's selection of a site....