Organizations entering new markets and regionsglobally prefer one of the two app

Question

Organizations entering new markets and regionsglobally prefer one of the two
approaches:

• Have local production centers in eachregion.
• Make one production center as the globalproduction center for the product and feed the various regionalmarkets from this center.

List the three most important factors to take intoconsideration, in production planning and control for the twodifferent production strategies. Provide examples to illustrateyour answer. The Internet is a good source of information in thisregard.

Explanation / Answer

1) Service (Repair & Maintence), you do not want toproduce from one location if you wish to service yourproducts 2) Cost & Profit, you always want to keep inconsiderationto maximize profit and minimize cost. 3) Supply and Demand, you always want to keep an idea ondemand to know what you should supply, if any. Global Production: Generally minimizes cost if shipping does not cost much, whichmaximizes profit. However, for repairs to be made theshipping costs can add up very easily. From a supply anddemand aspect, you can ship everywhere that needs demand withoutfear of running the market dry. Local Production Centers: Minimizes cost of shipping and maximizes profit in service andlarge shipping costs (such as automobiles) industries. However, you have to carefully analyze the region to make sure youhave enough demand to eventually cover your fixed + variableexpeditures in region. Thus, for small business like microchips, I recommend globalproduction centers. Whereas, for large items, like automobiles, I recommendregional production centers.

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