Richard Capozzi, an entrepreneur in the high-fashion Italian shoe industry, is planning to relocate his manufacturing operation to the western part of the United States. He is currently considering two different locations. One possible location is outside Los Angeles, and the other is in Oklahoma City. In analyzing the plant site decision, he is considering several factors. The cost of land is high in Los Angeles. However, local government officials are willing to make tax concessions. This plant location is accessible to transportation; a railroad is adjacent to the plant and an eight-lane interstate is close. Capozzi has identified the West Coast region as his target market for this type of shoe. An artist by trade, he has developed a unique design that should create mass-market appeal in this geographic area. The Oklahoma City location has several advantages. Land cost is lower than in Los Angeles. Also, a large supply of trained labor is available in this region. Another key consideration Capozzi must deal with is raw material availability. The raw material is imported from Italy and is received at the port of entry in Los Angeles. If the operation were located in Oklahoma City additional ground transportation would be necessary. Transportation costs would, therefore, be lower for the Los Angeles plant, a fact that weighs heavily in Capozzi's decision.
Questions
1. What will influence the plant site decision for Capozzi, and which alternative appears to be optimal?
2. How can each relative factor be rated or evaluated to determine the optimal plant location?
3. How should the decision regarding plant layout and design be determined?
4. What resources will Capozzi need to implement the production plan?
5. Describe the techniques for assessing quality and explain how they might apply to a shoe manufacturer.