Abstract
The concept of plant focus emphasizes a firm's ability to increase productivity and lower cost by limiting the number and variety of operations at its production lines. In this paper, we present a quantitative modeling framework to analyze the choice between product focus and market focus strategies. We also study the effect of flexible manufacturing technology on plant focus. Our methodology is based on a facility design model that uses continuous functions in representing the spatial distribution of demand and cost parameters. One of the advantages of this approach is its ability to generate closed-form solutions with relatively little data. Furthermore, it enables us derive several managerial insights into plant focus decisions as well as the impact of technology alternatives on these decisions. Finally, continuous approximation approach has potential to complement more detailed mixed integer models.
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This research was partially funded by the Natural Sciences and Engineering Council of Canada (OGP 183631) and the Canada Research Chair in Distribution Management at HEC Montreal. Both authors are affiliated with the Center for Research on Transportation, which provided an excellent environment for collaboration. Three anynomuous referees and Gilbert Laporte, the guest co-editor, provided very helpful comments on an earlier draft of the paper.
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Dasci, A., Verter, V. Evaluation of Plant Focus Strategies: A Continuous Approximation Framework. Ann Oper Res 136, 303–327 (2005). https://doi.org/10.1007/s10479-005-2061-1
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DOI: https://doi.org/10.1007/s10479-005-2061-1