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Operations Management: Processes and Supply Chains, 12th Edition by Larry P. Ritzman, Manoj K. Malhotra, Lee J. Krajewski

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Factors Affecting Location Decisions

Managers of both service and manufacturing organizations must weigh many factors when assessing the desirability of particular locations, including their proximity to customers and suppliers, labor costs, and transportation costs. Managers generally can disregard factors that fail to meet at least one of the following two conditions:

  1. The Factor Must Be Sensitive to Location. In other words, managers should not consider a factor not affected by the location decision. For example, if community attitudes are uniformly good at all the locations under consideration, community attitudes should not be considered as a factor.

  2. The Factor Must Have a High Impact on the Company’s Ability to Meet Its Goals. For example, ...

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