Facility Location and the Theory of Production (PDF)

The design and location of production facilities are important aspects of corporate strategy which can have a significant impact on the socio­ economy of nations and regions. Here, these decisions are recognized as being interrelated; that is, the optimal plant design (input mix and output level) depends on the location of the plant, and the optimal location of the plant depends on the design of the plant. Until the late 1950s, however, the questions of where a firm should locate its plant and what should be its planned input mix and output level were treated, for the most part, as separate questions, and were investigated by different groups of research­ ers. Although there was some recognition that these questions are inter­ I 1928; Hoover 1948; Isard 1956], no detailed analysis related [e. g. , Pre doh or formal structure was developed combining these two problems until the work of Moses [1958]. In recent years scholarly interest in the integrated production/locaton decision has been increasing rapidly. At the same time that research on the integrated production/location problem was expanding, significant related work was occurring in the fields of operations research, transportation science, industrial engineering, eco­ nomics, and geography. Unfortunately, the regional scientists working on the production/location problem had little contact with researchers in other fields. They generally publish in different journals and attend dif­ ferent professional meetings. Consequently, little of the recent work in these fields has made its way into the production/location research and vice versa.