Operations Management 3-6 - Essay Example

Accessibility to customers is the key factor in improving gasoline sales. A tertiary hospital is also a preferred business for this location. The residential areas are near to it, there is no replacement market for this specialized service and healthcare services is a specific need of residents. The following factors of location B: close to major highways, on the major truck route of large transportation companies, not close to any residential neighborhoods and large open area where new development can occur is best suited for a garment processing company and a coffee processing plant.

The location of the operations of a garment vital to the efficiency and profitability of company operations. Choice of location determines the productivity of capital investments. Manufacturing facilities have unique locations and there are transport costs to distribution and consumption, hence, production location affects the costs of distribution and consumption. Accessibility of manufacturing facilities of garment processing and coffee processing plant is important as transport costs represent a significant proportion of the costs of production and distribution.

Without cost minimization, there will be no profit maximization. Location has a serious impact on a company’s revenues. 2. “Aggregate planning in manufacturing is easier to accomplish than aggregate planning in services.” For example, aggregate planning for a textile processing plant is easier to implement than for a business process outsourcing company. A textile company is basically a labor intensive business. This means that the company uses large amounts of labor per unit output, and that wages form the largest single cost (50-70 percent of total costs) faced by employers.

The cost of labor is therefore the most important locational determinant in the textile industry. The textile industry has been