Evaluation of plant focus strategies: A continuous approximation framework

The concept of plant focus emphasizes a firm's ability to increase productivity and lower cost by limiting the number and variety of operations at its production lines. In this paper, we present a quantitative modeling framework to analyze the choice between product focus and market focus strategies. We also study the effect of flexible manufacturing technology on plant focus. Our methodology is based on a facility design model that uses continuous functions in representing the spatial distribution of demand and cost parameters. One of the advantages of this approach is its ability to generate closed-form solutions with relatively little data. Furthermore, it enables us to derive several managerial insights into plant focus decisions as well as the impact of technology alternatives on these decisions. Finally, continuous approximation approach has potential to complement more detailed mixed integer models.