Question

Question 3

There are certain instances where merging (combining) the location of services operations can be desirable. However, the separate locations mean less travel time for workers, but sometimes there will be a waiting line at one location while servers are idle at another location.

Q4.1) What factors should an analysis of this sort of situation take into account in deciding on whether to keep separate locations or pool services servers and equipment at one central location?

Q4.2) What factors and methods used to select the right location for service provider?

Answer 1

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The decision associated with the use of separate location or pool servers is generally depends on several factors such as the production line, involvement of time, availability of required human resources, labor cost, available budget ect. Therefore, the organization should analyze some important factors that are skills of existing human resources, their availability to implement the operational task, operational cost, delivery timing also. Further, the design of the product should also analyze during the decision making related to location because if the assembling of the product requires time and different product lines to finish operational tasks completely, then the selection of separate location would be benefited. Otherwise, the pool of servers and equipment will be at one central location would be the best option, when a single product line is used for the production of product and changes in location increase the production time and operational cost.

ALTERNATIVE ANSWER:

Here an assumption is being made that the separate locations means that there is a full complement of mechanics and their tools at each location and not just tools and equipment as stated earlier. This is because if only the tools and equipment was kept in separate locations the travel time for the mechanics would be from the central location to the tools and equipment location and thence to the location where the service was required. This therefore will have to be treated as a multiple server problem with each location being treated as a server. Therefore to decide whether these separate locations are justified or not one has to do a cost analysis. The total cost consists of the following 2 parameters:

The aim is to minimize the total cost. This means that the cost of establishing the additional servers has to offset the reduction in the total waiting time of the system. As the number of servers increases the capacity, cost also increases. It has been found that the total cost tends to follow a hyperbolic curve with it decreasing initially and then rising as the number of servers increases. This has to be carefully analyzed to arrive at an optimum number of servers.

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