ABSTRACT
This chapter briefly discusses the topics that relate the financial well-being of a manufacturing firm. In the first section, the traditional, nonquantitative method of selecting a plant site is examined. This analysis could serve as a screening process for the quantitative methods described in the location analysis segment in Part I of the book. Section 15.2 deals with utilities. No plant can function without utilities, which can be a major expense. Every effort should be made to reduce the cost, and Section 15.2 examines sources and alternatives for providing utilities. Section 15.3 deals with insurance. To remain in business, almost every firm must have insurance or be self-insured. This section examines types of insurance policies that a manufacturing organization must have and provides examples of total insurance programs. A safe operating environment goes a long way toward reducing insurance cost, and Section 15.4 discusses safety practices and gives an example of a program that encourages safety in a plant. All manufacturing organizations must comply with the Americans with Disabilities Act (ADA) of 1990. Section 15.5 discusses the act as it relates to manufacturing facilities. Taxes are a major financial burden that is unavoidable. The projected sales cost of the product must reflect the tax liabilities, and Section 15.5 describes some of the taxes that frequently must be considered. Section 15.6 focuses on financial statements; it briefly describes how a firm might evaluate total cost and determine the unit cost of production. If the sale price is unknown, it might be possible to develop a balance sheet from the information generated thus far.
