When building facilities that use non-traditional energy sources such as wind or solar power, there are many factors to consider when choosing a location. In addition to weather conditions, it is also important to keep in mind the delivery of electricity to its destination, that is, consumers, so it is advisable to place construction near large cities (Mostafaeipour, 2020). In general, choosing the location for the new facilities can be influenced by general and specific factors. This paper aims to describe how the location for the new manufacturing facilities is chosen.
The general factors of location planning determine the final choice. These factors include controllable factors like proximity to markets, supply of materials, transportation facilities, infrastructure availability, labor and wages, and capital (Liu et al., 2019). The uncontrollable factors are government policy, climate conditions, supporting industries, community infrastructure, and others (Liu et al., 2019). Notably, for the construction of the solar plant, the proximity to the customers should be considered, which is why the location near the big city will be preferred.
The supply of construction materials will determine the location as well. Importantly, the number of sunny days per year in the region will have to meet the general requirements. Transportation opportunities are related to the transport of building materials and the transfer of finished electricity, which require connection with available infrastructure, including electricity, water supply, and waste disposal. Employee pay will be dictated by regional wage levels, and capital will account for construction costs by region.
Interestingly, choosing a location may include applying techniques to evaluate the location alternatives. For example, Aktas and Kabak (2019) suggest the “Analytic Hierarchy Process” and “Technique for Order Preference by Similarity to Ideal Solution” original methods that the scholars developed for this purpose. Noteworthy, managers can develop techniques that will meet the requests of the current environments by using the relevant theories of management.
The construction of the plant and the location chosen will also be related to strategic capacity planning since this factor will determine the size of the new plant. The process of strategic capacity planning should consider the determinants of effective capacities, such as facilities, product and service factors, process, human, policy, operational, supply chain, and external factors (“Strategic capacity planning,” 2022). Interestingly, the factors to be considered during capacity planning overlap with the factors analyzed when planning the location since these two processes are closely related.
Decision theory is a handy tool that can be used when planning the construction of a solar plant and choosing the location for it. This theory implies that an individual’s decisions in each case are completely determined by his values, desires, and beliefs (“Decision theory,” 2020). To be more precise, the individual evaluates preferences and perspectives when developing choices or actions and is guided by rational thinking. Decision-making also includes the application of utility preference measures and utility cardinality. Other decision theories focus on varying particular aspects of the process.
Thus, it was described how the location for the new manufacturing facilities is chosen considering the management theory. Location planning is most important when choosing the spots for future construction. This process implies the analysis of external strategic factors like market proximity, supply of materials, wages, and capital. When deciding to choose the spot, the manager can also apply strategic capacity planning to estimate the size of the future plant and the purposes of production.
References
Aktas, A., & Kabak, M. (2019). A hybrid hesitant fuzzy decision-making approach for evaluating solar power plant location sites. Arabian Journal for Science and Engineering, 44(8), 7235-7247. doi.org/10.1007/s13369-018-3604-5
Decision theory. (2020).
Liu, H. C., Yang, M., Zhou, M., & Tian, G. (2019). An integrated multi-criteria decision-making approach to location planning of electric vehicle charging stations. IEEE Transactions on Intelligent Transportation Systems, 20(1), 362-373. doi.org/10.1109/TITS.2018.2815680
Mostafaeipour, A., Qolipour, M., Rezaei, M., Jahangiri, M., Goli, A., & Sedaghat, A. (2020). A novel integrated approach for ranking solar energy location planning: A case study. Journal of Engineering, Design, and Technology, 19(3), 698-720. doi.org/10.1108/JEDT-04-2020-0123
Strategic capacity planning. (2022).