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Distribution center, warehouse, and plant location - Essay Example

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Cost considerations have influenced facility location decisions of the companies, which shifted their manufacturing departments to the countries where labor cost was low. The reason was the increase in the prices of oil in 2008, which resulted in increasing the transportation…
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Distribution center, warehouse, and plant location
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Download file to see previous pages For companies, high population is always a big market for their goods. The reason is that when there is a high population in a country, the sales of the companies go high because of presence of a large number of consumers. Therefore, companies view population as a market for goods. On the other hand, population is also a source of labor. Companies need to recruit people to run business operations. Therefore, companies also view population as a source for labor.
Transportation considerations influence facility location decisions because high transportations costs increase the price of goods. The most suitable facility locations are those where transportation services are easily available. When a facility is located at a place, where there is a shortage of transportation services, transportation costs will be high because of less competition. Therefore, companies usually find such locations, which there is an excess of transportation services.
Facility relocation occurs when a company shifts a facility from one place to another due to some reasons. On the other hand, facility closing occurs when a company suspends its business operations at a facility when the company does not need that facility to operate any more. In case of facility relocation, employees do not face big problems because they can still work for their companies. However, the companies should adjust their wages in accordance with the location of the new facility. On the other hand, in case of facility closing, companies should arrange new jobs for their employees before the date of closing in order to secure their professional ...Download file to see next pagesRead More
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