Category Archives: Facility Decisions: Location and Capacity

Exchange Rates

Exchange Rates The volatility of the exchange-rates between countries can have a significant impact on sales and profits. For example, the change in rates between the Japanese Exchange Rates. yen and the U.S. dollar from below 90 yen per dollar to more than )20 yen per dollar between 1996 and 1997 increased the price competitiveness of Japanese products in the United States while decreasing the ability of U.S. pr

Facility Costs

Facility Cost  Undeveloped or third-world countries often offer incentives in the form of low-cost manufacturing facilities to attract companies. For example, within the People’s Republic of China (PRC) many special economic zones (SEZ) have been established that are exempt from tariffs and duties-provided that the products made there are sold outside the Provide In some countries, the local government w

Distribution Costs

Distribution Costs As we become more. global, distribution and transportation costs take on added importance. In addition to the cost of transportation, the time required to deliver the products also’ must be taken into consideration. Consequently, in many cases the low costs associated with manufacturing products in Asia are offset by the long lead times and the high cost of delivery to markets in North

Labor Costs

Labor Costs Labor costs can vary dramatically, depending on location. In Western Europe, the United States, and Japan, the cost of labor can exceed US$19.00 per hour in comparison to countries in Asia where the cost can be less than US$7 .00 per day (see Exhibit 7.1) An important factor that must be considered is the skill requirements of the worker. Although the cost of labor in many areas is very cheap, the w

Quantitative Factors

Quantitative Factors The quantitative factors include (a) labor costs, (b) distribution costs. (c) facility costs, (d) exchange rates, and (e) tax rates.

Operations Management In A Practice

WHY BOSTON SCIENTIFIC LOCATED ITS PLANT IN IRELAND Boston Scientific Corporation (SSG) is a manufacturer of disposable medical devices, with its headquarters in Natick, Massachusetts. With its strong emphasis on customer support, SSC decided to establish a physical presence that was nearer its rapidly growing European market. After analyzing several potential locations on both the continent and in the Uni

Political Economic Stability

Political Economic Stability The stability of a region refers to the number and intensity of economic and political fluctuations that might occur there.

Product Content Requirements

Product Content Requirements Content requirements state that.a minimum percentage of a product must be produced within the borders of a country in order of that product to be sold in that country. This assures jobs in the local economy while reducing the difference between imports and exports. For example for a car to be sold in the Philippines, it must be assembled there. Consequently, each of the major car ma

Worker Education and Skills

Worker Education and Skills The increased 'sophistication of today's manufacturing processes requires that the workforce be highly educated and equipped with a wide variety of skills. Increased emphasis on automation requires specific worker skills to operate and maintain equipment. Modern manufacturing processes like just-in-time (JIT) also require a well-educated workforce. As an illustration, the significant

Local Infrastructure

Local Infrastructure The local infrastructure that is necessary to support a manufacturing operation can be divided into two broad categories institutional and trans portational With manufacturing operations becoming more flexible and responsive to customer requirements, there is a growing dependence on local institutions or suppliers to be more flexible and responsive. In addition, the local transportation net