4) Explain any four (4) major factors that affect location decisions.
COSTS
We can divide location costs into two categories, tangible and intangible. Tangible costs are those costs that are already identifiable and precisely measured. For example, utilities, labor, material, taxes, depreciation, and other costs that the accounting department and management can identify, transportation of raw materials, transportation of finished goods and site construction.
Intangible costs are less easily quantified. For example, quality of education, public transportation facilities, community attitudes toward the industry and the company, and quality and attitude of prospective employees and quality-of-life variables.
PROXIMITY TO MARKETS
For many firms, locating near customers is extremely important. Particularly, service organization find that proximity to market is the primary location factor. For example, drugstores, restaurants, post offices and barbers.
Manufacturing firms find it useful to be close to customers when transporting finished goods is expensive or difficult, perhaps because they are bulky, heavy or fragile. For example, Mercedes, Honda, Toyota and Hyundai are building millions of cars each year in the U.S.
With just-in-time production, suppliers want to locate near users. For example, Coca-Cola, whose product’s primary ingredient is water, it makes sense to have bottling plants in many cities rather than shipping heavy containers, which sometimes fragile glasses cross country.

PROXIMITY TO SUPPLIERS
Firms locate near their raw materials and suppliers because of perishability, transportation costs or bulk. For example, bakeries, dairy plants and frozen seafood processors deal with perishable raw materials, so they often locate close to suppliers.
Company dependent on inputs of heavy or bulky raw materials face expensive inbound transportation costs. For example, steel producers using coal and iron ore.
Goods for which there is a reduction in bulk during production, which typically need to be near the raw material. For example, lumber mills locating in the Northwest near timber resources.
PROXIMITY TO COMPETITORS
Both manufacturing and service organizations also like to locate, somewhat surprisingly, near competitors. This tendency called clustering, often occurs when a major resources such as natural resources, information resources, venture capital resources and talent resources are found in that region. For example, fast-food chains such as McDonald’s and Pizza Hut located at sites within 1 mile of one another in order to stimulates food sales and encourage high traffic flows.

7) List and define any five (5) concepts for an effective TQM program.
CONTINUOUS IMPROVEMENT
It represents continual improvement of process and customer satisfaction which involves all operations and work units. The other name in Japanese is kaizen, in U.S is zero defects which describe these continuous improvement efforts.
For example, gardenia products such as twiggies, waffle and butterscotch flavor.
EMPLOYEE EMPOWERMENT
It is getting employees involved in product and process improvements. 85% of quality problems are due to process and material not with employee performance. Techniques for building employee empowerment include give supports to workers, carry-out two way communication to listen the employee’s opinion, let the workers make decisions and build teams and quality circles.
BENCHMARKING
Benchmarking is the process in selecting best practices to use as a standard for performance. The steps for developing benchmarks are determine what to benchmark, form benchmark team, identify benchmarking partners, collect and analyze benchmarking information and lastly take action to match or exceed the benchmark.
JUST-IN-TIME
JIT system are designed to produce or deliver goods just as they are needed. JIT cuts the cost of quality because scrap, rework, inventory investment and damage costs are directly related to inventory on hand. It is proved that inventory hides bad quality, whereas JIT immediately exposes bad quality. JIT improves quality as JIT shrinks lead time it keeps evidence of errors fresh and limits the number of potential sources of error.
JIT is a pull system of production/purchasing which customer starts production with an order. To improve the quality of purchased items, vendor partnership programs are involves. JIT reduces all inventory levels which the inventory hides process and material problems. It also improves the process and product quality.
TAGUCHI TECHNIQUES
Experimental design methods to improve product and process design which identify the key component and process variables affecting the product variation. Genichi Taguchi has provided us with three concepts aimed at improving both product and process quality.
Quality robust products are products that can be produced uniformly and consistently in adverse manufacturing and environmental conditions. Quality loss function identifies all costs connected with poor quality and shows how these costs increases as the product moves away from being exactly what the customer wants. Target-oriented quality is a philosophy of continuous improvement to bring the product exactly on target.