Final answer:
The preferred production layout for pharmaceutical manufacturing is a process layout due to the need for quality control and adherence to GMP. Cost considerations, such as the increased cost of machines, also necessitate a layout that optimizes the use of labor. Market structure considerations, like market power and product differentiation, are as critical as efficiency in choosing a layout.
Step-by-step explanation:
Optimal Production Layout for Pharmaceutical Manufacturing
When establishing the manufacturing of pharmaceutical products, the type of production layout that is preferable is often the one that can ensure the highest level of product quality and control over the production process. Cleanliness, contamination control, and adherence to Good Manufacturing Practices (GMP) are critical factors in the pharmaceutical industry. Given these priorities, the process layout is often favored because it allows for equipment and machines to be arranged based on the sequence of operations, which can help to maintain stringent control over the manufacturing process.
Another significant factor is the cost of the machines and technology used in production. If the cost of machines has increased, a shift toward a layout that balances the use of capital equipment with labor might be necessary to minimize total costs. Decisions on production layout must also consider the market structure of the industry, including factors such as market power, product differentiation, and barriers to entry.
As an extension of this logic, it is insightful to look at industries that emphasize market orientation, such as bulk gaining industries. These industries typically involve a production process where the product becomes heavier or more costly to transport during manufacturing. An example is Coca-Cola, which ships its concentrated syrup to various locations rather than shipping the final product, thus saving on transportation and leveraging local resources. This strategy is similar in philosophy to what might be applied to pharmaceutical manufacturing, where having multiple production sites closer to key markets could make the distribution more efficient and cost-effective, especially when considering the transportation of sensitive or perishable products.