Mr.

The KepnerÐŽ¦s case study

A location has to be found for establishing Kepner Regional Health Centre. The deciding group consist of 3 commissioners, having three different views, a suitable location has to be chosen for the given case.

The location:

Kepner County covers a very large area that is approximately 100 miles by 100 miles and it is located in a sparsely populated region of a western state of the USA. The current availability of health care in the county is extremely limited. This is due largely to the fact that the entire county only has about 6,000 residents. This population is spread over 10 primary communities in the county: Aurand (L1), Harman (L2), Clelland (L3), Cornell (L4), Maxham (L5), Gunn (L6), Eason (L7), Jenks (L8), Brownell (L9) and Linda (L10).

Location in coordinate grids:

Literature review:

The efficient and effective movement of goods from raw material sites to processing facilities, component fabrication plants, finished goods assembly plants, distribution centers, retailers and customers is critical in today.s competitive environment. Approximately 10% of the gross domestic product is devoted to supply-related activities (Simchi-Levi, Kaminsky, and Simchi-Levi, 2003, p. 5). Within individual industries, the percentage of the cost of a finished delivered item to the final consumer can easily exceed this value. Supply chain management entails not only the movement of goods but also decisions about (1) where to produce, what to produce, and how much to produce at each site, (2) what quantity of goods to hold in inventory at each stage of the process, (3) how to share information among parties in the process and finally, (4) where to locate plants and distribution centers.

Location decisions may be the most critical and most difficult of the decisions needed to realize an efficient supply chain. Transportation and inventory decisions can often be changed on relatively short notice in response to changes in the availability of raw materials, labor costs, component prices, transportation costs, inventory holding costs, exchange rates and tax codes. Information sharing decisions are also relatively flexible and can be altered in response to changes in corporate strategies and alliances. Thus, transportation, inventory, and information sharing decisions can be readily re-optimized in response to changes in the underlying conditions of the supply chain. Decisions about production quantities and locations are, perhaps, less flexible, as many of the costs of production may be fixed in the short term. Labor costs, for example, are often dictated by relatively long-term contracts. Also, plant capacities must often be taken as fixed in the short-term. Nevertheless, production quantities can often be altered in the intermediate term in response to changes in material costs and market demands.

Facility location decisions, on the other hand, are often fixed and difficult to change even in the intermediate term. The location of a multibillion-dollar automobile assembly plant cannot be changed as a result of changes in customer demands, transportation costs, or component prices. Modern distribution centers with millions of dollars of material handling equipment are also difficult, if not impossible, to relocate except in the long term. Inefficient locations for production and assembly plants as well as distribution centers will result in excess costs being incurred throughout the lifetime of the facilities, no matter how well the production plans, transportation options, inventory management, and information sharing decisions are optimized in response to changing conditions.

In Supply Chain Design, therefore, choosing location plays a vital role.

Krajewski & Ritzmen in their Operation Management text book (2005,7 ed, Prentice hall) Propose the following points should be considered in locating:

Ñ"ЮBesides distributing outputs to customers by transporting them, if there is a facilitating good, we can also locate where our customers can easily obtain them.

Ñ"ЮAdvances in information and telecommunications technology have allowed some pure service organizations (i.e., those without a facilitating good) to reach their recipients through phone, cable, the Internet, or microwave links.

They have also explained there is a trade ÐŽV offs between them:

Ñ"ЮProcessing Natural Resources

„RLarge loss in size or weight during processing

„RHigh economies of scale exist

„RRaw material is perishable

Ñ"ЮImmobile Outputs

There are many methods to chose location, but centre of gravity is sutiable method, as we presume:

Several models have been applied at regional level for health care facility planning relating the efficiency of the system and the allocation of resources. The majority of these models consider geographic access (generally measured in terms of traveling cost) as the most significant factor in the utilization of health services. In a broad outline their analysis concerns the minimization of distance or time that patients have to travel from their residence to the medical facilities.

Method:1 Flow chart methodology

Reference: Article: Applications of GIS in Healthcare Planning of Lao PDR.

Kulapamote Prathumchai, Lal Samarakoon Asian Center for Research on Remote Sensing (ACRoRS), Asian Institute of Technology,

Method2: Centre of Gravity

The center of gravity is a geographical center of set