You have to site a new paper/pulp factory. Given the choice, where would you locate it...

You have to site a new paper/pulp factory. Given the choice, where would you locate it - on an estuary, on a river or on land? Explain the possible problems in each case and justify your decision.

Expert Solution

My first Choice of location is an Estuary: The justification is the estuary is directly connected to sea and source of water is tides in a sea. So, there will be a very less chance of lack of water in any climatic conditions. The main raw material in the pulp production is wood but the main processing material is water. The aim is to locate the factory near to estuary is to bring down the supply chain cost of the main processing material (i.e. water). This way I will be able to save huge cost on transportation. The possibility of wood required for pulp is equal for river but land option may be dominant in case forest is near. But in that case water inventory cost will be higher and there will be an uncertainty to get water on time.

Possible problems in each case:

Particular	Estuary	River	Land
Consumer Market	The chances of high distance will be more so cost of supply chain to costumer will be more	The chances of high distance will be moderate.	The chances of distance will be low.
Legal & Regulatory	The regulations will be less as normally this water is not for drinking use	The regulations will be higher as normally this water is for drinking use	The regulations will be higher because of land acquisition rule.
Operational cost	The overall operational cost of plant will be less as the resources will not be needed more for water inventory management and layout will be easy because of less obligations.	The overall operational cost of plant will be moderate because of some obligations on plant layout.	The operational cost will be higher because of both wood and water will not be having any automatized supply chain.
Availability of chemical	Difficult. Should have advance stock.	Moderate	Easy because of road connectivity
Security cost	High	Moderate	Low
Skilled labor issue	Moderate issues	Moderate issues	Less issues
Unskilled labor issue	Less issues	Moderate issues	Moderate issues
Cost savings	High, because of easy availability of water	Moderate, because in some regulations, water may not be available	High

keosha answered 5 hours ago

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