An entrepreneur needs a tool on an enterprise level to determineopportunities and threats in a global perspective. Theproductionallocation approach described in this article could be such atool in developing a firms international manufacturing strategy. Theapproach is built around the production and cost function for therelevant manufacturing systems in the integral production chain for aspecific product. The main question then is to determine the optimumlocation of the various manufacturing systems. In this article, theoptimum location is the one which minimises the sum of manufacturing andtransport costs. A case study based upon research for a Europeanproducer of foodstuffs is presented to illustrate the concepts of theproductionallocation approach.
International Journal of Operations & Production Management – Emerald Publishing
Published: Mar 1, 1991
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