IE 421/621–Facility Location and Layout–Fall 2022
Question 1:Under what conditions would a firm not need a facility in order to function?
A firm would need a Facility if it needs a physical existence to do its business whether it is a product business or a service business. The main difference is that a product business sells physical, tangible objects, whereas a service business provides value through intangible skills, expertise, and time. By this definition, all product businesses need a physical facility. The physical facilities consist of all the buildings, grounds, equipment, and infrastructure required to create/manufacture a product. Product quality and profitability are directly affected by the condition of the physical surroundings, equipment, and work areas regardless of the size or scale of the manufacturing operations. On the other hand, not all service businesses need a physical facility. A firm that can provide its service and its employees can collaborate through phone, Internet, or any other way that does not require the physical existence of the people (customers, employees) or goods does not need a facility. Examples: Low-scale service companies that work on customer’s sitesfall under this category, and Logistics companies do not.
https://www.coursehero.com/file/183482260/28072985pdf/
https://louisville.uloop.com/course-notes/41456-IE/3778136-IE-621-FACILITIES-PLANNING
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