Question: Read the extract below and answer the question that follows: Facility location decisions play a crucial role in the logistics activities involved in supply chain
Read the extract below and answer the question that follows: Facility location decisions play a crucial role in the logistics activities involved in supply chain management. In real-life settings, the optimisation of location and allocation decisions is often preceded by an evaluation of the existing distribution network system. Such an evaluation starts by assessing the quality of the current locations of the service facilities and the allocation of customer demands to those facilities. Companies often don't consider the location decision to be a Lean concept, but they should. Moving goods efficiently from raw material sites to processing facilities, manufacturers, distributors, retailers, and customers is critical to remaining competitive in today's global economy. When manufacturers make location decisions, their priority is to minimise cost. Retailers look to maximise revenue where possible. Locating new facilities is a strategic decision that, once made, cannot be changed easily in the short term. Yet many organisationsespecially small and mid-sized businessesoften neglect or delay this decision. An entire organisation can feel the impact of indecisionespecially in today's global economy, which is far from static. Risks include demand volatility, omni-channel distribution, shrinking lead times, reduced product development, and shorter product lifecycles.
Comprehensively discuss reasons why businesses must consider facility location decisions as one of the critical aspects in relation to logistics operational planning
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