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1. Preamble: 6
2. Factors That KFC Management Keep in Mind during Facility Location Analysis: 7
2.1. Proximity to Customers: 7
2.2. Business Climate: 8
2.3. Total Costs: 8
2.4. Infrastructure: 8
2.5. Quality of Labor: 8
2.8. Host Community: 8
3. Facility Location Techniques: 9
3.1. Method of Factor Rating: 9
3.2. Cost-Profit-Volume Analysis: 11
4. Facility layout: 13
4.1. Factors that influence layout: 13
4.2. KFC Facility Layout: 13
4.3. Advantage of KFC Good Layout: 14
4.4. KFC Layout Map: 15
5. Conclusion And Recommendation: 15
6. Reference: 16
1. Preamble:
• Presently KFC has provided to over 1200 Pakistanis, which adds up to 6000 individuals
directly dependent in KFC Pakistan.
• The Government of Pakistan receives over Rs.10 million per month from KFC Pakistan as
direct taxes.
• 95% of all food and packing material used in KFC Pakistan is procured locally, which
sums up to a purchase of over Rs.35 million per month.
• Each new outlet developed by KFC Pakistan costs approximately Rs.40 million, which is
a huge amount for our construction industry.
Existing Locations of KFC In Lahore:
Cavalry Gound Defence Barket Market
Property No. 77, 160/2, Block 2, Plot 27 A&B, Ali Block,
Commercial Zone, Cavalry Phase-1 LCCHS, New Garden Town,
Ground, Ext Lahore Cantt. Lahore Lahore.
For Delivery: For Delivery: For Delivery:
Ph: 111-532-532 Ph: 111-532-532 Ph: 111-532-532
Chicky Fun Area Chicky Fun Area Chicky Fun Area
Shadman Thokar Niaz Baig Mall Road
Plot No. 2, Opposite Toyota Ravi 70 - Copra Building,
Shadman 2, Jail Road, Motors, Near Shah The Mall Road,
Lahore. Pur Interchange Multan Lahore.
For Delivery: Road, Lahore. For Delivery:
Ph: 111-532-532 For Delivery: Ph: 111-532-532
Chicky Fun Area Ph: 111-532-532
GT Road Y-Block M.M. Alam Road
2. Factors That KFC Management Keep in Mind during Facility Location Analysis:
There are several factors that influence the Facility Location Decision
2.1. Proximity to Customers:
KFC Management during facility location analysis keeps in mind the proximity of target customers
and target market, so that the target customer can be approached easily to outlets.
2.2. Business Climate:
It is another important factors determined by the KFC during the locations analysis. The location
with favorable business environment is selected for the KFC by the management.
2.3. Total Costs:
The core objective of the KFC is to select a site with the lowest total cost include land, labor,
constructions, taxes and energy cost. By minimizing the total cost they can be able to reduce the
product cost.
2.4. Infrastructure:
The locations enriched with adequate infrastructure i.e. road, rail, air and sea transportation etc. are
ideal for the KFC management.
2.5. Quality of Labor:
The location where the skilled labor is easily available is attractive for the KFC outlets. KFC
Management specially determined this factor in mind at the time of location selection because the
easily availability of skilled labor can deal with customer effectively and easily. Labor cost
decrease due to easily approach to the labor.
2.8. Host Community:
KFC management also determined the interest of host community during the facility location
analysis. If the host community is in the favors of KFC new project then the project started.
• Site B. Shadra
After evaluating the firm’s Needs, the Managers have narrowed the list of Important Selection
Criteria down into three major Factors.
- Availability of skilled labor
- Availability of suitable Infrastructure, and
- Proximity of target customers.
Weights reflecting the relative importance of each factor have been assigned as follows:
Based on these criteria, the three Alternative sites were scored between 0 and 100 points:
From these results, the largest total weight is for Site A. It appears to be the best location.
What happens if we change the factor weights. Lets use the following factor weights:
Skilled labor: 0.45; Raw Materials: 0.40; and Market: 0.15
Then the following results are obtained:
In this case, Site “C” appears to be the best choice with largest weight score.
Therefore, factor rating method is very sensitive to the weights assigned to each factor.
Since factor weights, selected factors, and assigned scores are all determined subjectively, the
managers should be very careful in selecting these items and numbers.
• Site B. Shadra
The Annual Production Cost associated with each alternative is a linear function of the production
volume. That is:
Total Production Cost = (Fixed Cost) + (variable unit cost) x (annual production volume)
Assume that The expected annual production volume is 250.000 units.
And further assume that:
(x: production volume = 250.000)
For Site A: Prod. Cost = 10.000.000 + 250 x
For Site B: Prod. Cost = 25.000.000 + 150 x
For Site C: Prod. Cost = 60.000.000 + 50 x
Based on these information, Which site has the lowest cost?
At a production volume of 250.000 units, site B has the lowest cost, because
For Site A: Prod. Cost = 10.000.000 + 250 (250.000) = 72.500.000
For Site B: Prod. Cost = 25.000.000 + 150 (250.000) = 62.500.000
For Site C: Prod. Cost = 60.000.000 + 50 (250.000) = 72.500.000
This graphic shows that annual production cost changes with different production volumes.
-If the expected annual production volume is below 150.000 units, then choose site A.
-If the expected annual production volume is between 150.000 and 350.000 units, then choose site
B.
-If the expected annual production volume is over 350.000 units, then choose site C.
4. Facility layout:
Means planning And Arrangement of all machines, utilities, employee workstations, customer
service areas, material storage areas, aisles, restrooms, lunchrooms, internal walls, offices, and
computer rooms, for the flow patterns of materials and people around, into, and within buildings
Infrastructure services such as the delivery of line communications, energy, and water and the
removal of waste water all make up basic utilities.
• Increases morale.
• Provides flexibility.
Cook
Deliver
Raw Material
Finished Goods
Assemble
Assemble
W. I. P.
Cook
Raw Material
Deliver
6. Reference:
1. Official web sites.
www.kfc.com
www.kfc.pk
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