stored (ilke sailboats), you can build inventories during slack periods to be used when demand exceeds capacity Facilities Location Planning choose When you determine the need for additional capacity, you must design and ity process is called facilities location planning. Where you choose to locate will This depend on which factors have the greatest impact on total production and distribution costs. These include availability of needed labor skills, labor costs, energy costs, proximity to suppliers or customers, and the like, Rarely are all these factors of equal importance. The kind of business you're in dictates your critical contingencies, which then dictate a large degree--the optimal location. number of For example, the need for skilled technical specialists has led an increasing high-tech firms to locate in the Boston area. The area's high concentration of colleges and universities makes it easy for firms that require employees with computer, engineering, and skills to find and hold onto such people. Similarly, it's not by chance that many manufacturers whose transformation processes are labor intensive have moved their man. ufacturing facilities overseas to places such as Taiwan and Malaysia. When labor costs are critical contingency, organizations will locate their facilities where labor wage rates are low For instance, the Us, women's shoemaker Nine West Group Inc. does all its production the region of Val do sinos, Brazil, because of the low labor costs, Tire manufacturers chose their original locations in northern ohio in order to be close to their major customers,