ANALYSIS BASED ON QUANTITATIVE FACTORS

	(a) Comparative/Least Cost Center Analysis: This simple type of analysis is appropriate where the location problem concerns the placement of a single plant. There can be two approaches, namely (i) Comparative cost chart (ii) Least cost centre analysis
	MEANING OF PRODUCTION MANAGEMENT
	Production management, alternatively referred to as manufacturing management, is required for transforming raw materials and partly, fabricated materials into finished products. Production management does not imply management of productive process alone, but it covers all there activities which go into the making of production. To make production a concrete reality, one ,must pay heed to the factors of production like land, labour, capital and organization, or to speak in the language of business, materials, men, money, machines and methods. Production management thus calls for the work of planning and control pertaining to each of these factors of production. Production management does not involve a mechanical assemblage of relevant factors. In contrast to mere transformation of raw materials into finished products, it aims at transmuting and permuting resources of higher productivity so that the greatest outputs are obtained from the least inputs. With its end in views, production management embraces the productive process too and involves planning, directing and controlling operations till their successful completion. Quality, quantity, cost and time of production have an important bearing on productivity of the manufacturing enterprise. Accordingly, it is the task of production management to see that effective utilization of resources is made, time is shortened, wastes and scrapings are avoided, and harmonious working is made to prevail in the plant. For effective managerial performance, the work of production department is required to be organized on sound lines. All the principles and practices of organizing are to be applied in building a sound structure for improving the result of production management. Successful production management is not practicable without the existence of an appropriate organization structure. Consequently, managerial efforts are to be directed in designing an organization structure that conforms to the needs of the product, size of the enterprise and availability of production facilities. Organizing for production may be conceived in broader sense to include some aspects of works engineering or works organization like plant layout and factory building. The problems of production management differ form case to case and are mainly related to the system of production. There are several systems of production which determine the magnitude of production work and the problems to be tackled in manufacturing operations. Hence, a familiarity with the different systems of production is required for understanding the intricacies of production management. Of course, the system of production is dictated in a particular case by the volume of sales and the nature of product. The quantity to be produced is nothing but an answer to the question of 'what can be sold”. In the ultimate analysis, therefore, sales are the regulator of a system of production. The management of transformation process of inputs into output is the essence of production management. In present competitive world the production process in every enterprise needs some effective and scientific planning as well as proper control. Thus production management can be defined as “Management which by scientific planning and regulation sets into motion the part of an enterprise to which it has been entrusted the task of actual transformation of inputs into output”. In the words of Mr. E.L. Brech, “Production Management then becomes the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for the actual transformation of materials into finished products”. This definition appears to be incomplete as it does not include the human factors involved in a production process. It lays stress only on the materialistic features. In broader sense, production management actually deals with decision making related to production processes, so that the resulting goods and services are produced in accordance with the quantitative specifications and demand schedule with minimum cost. To attain these objectives the two main activities of Production Management are the Design and Control of production systems. In production management effective planning and control are essential. In the absence of effective planning and regulation of any production activity the goals cannot be achieved, the customers may not be satisfied and ultimately certain activities may be closed which may lead to social evils.
	MEASUREMENT OF WORK
	In an engineering sense efficiency can be simply stated as the ratio of useful energy obtained to energy applied. We can all understand that. Put succinctly, that is what is really meant by efficiency of production, but the difficulty is to see the relationship between input and output of production, or to measure performance. Which brings us right to the heart of the problem of efficiency of production: how to measure performances. There is usually some difficulty about measuring the comparative performance of several departments in a Company or different companies. If two factories are turning out the same product which is measured in tons or feet, then overall cost per ton or per foot is a measure of performance which can be obtained readily and used for comparison. But how does one compare the costs or efficiency of two factories or department s making dissimilar products ? Cost per ton or unit is no good. As between two different firms, only the percentage net profit is any measure, and that is affected by the type of market and selling cost which are not production costs. And between different departments in the same firm there would seem to be, at first sight, no measure of efficiency on a common and therefore comparable basis. If, however, the amount of “effort” (or cost-material, labour and overhead services) which should have been sued to make a given quantity of a product is known and also the amount actually used, then surely the correct amount as a proportion of the actual amount is a measure of performance of efficiency. It is in reality an efficiency formula again, output over input. The real value of output, in effort, hours or s.d., is the amount of cost which goes out of the factory or department in a useful form, i.e., it does not include all wastage and excess costs, avoidable, and of no benefit to customer or company. And input is the total of all effort and costs absorbed. Including excess costs.