PLANT LOCATION

That location which, in consideration of all

factors affecting products delivered-to-customers
cost of products to be manufactured, will afford
the enterprise the greatest advantages obtained by
virtue of location.

NEED FOR SELECTING A SUITABLE LOCATION:

1. When starting a new factory
2. In case of existing factory
1. Whether to expand the existing capacity and facilities
2. Whether to look for new locations for additional facilities
3. Whether to close down existing facilities to take advantage of some new
loactions.

FACILITY LOCATION DECISION:

1. National Decision
3. Community Decision

2. Regional Decision
4. Site Decision

Factors affecting National Decision:

1.
2.
3.
4.

Stability of Government, Economy and Political System.

Labour Availability and costs
Export and Import Quotas, Duties and Fees.
Currency Exchange Rates.

5. Transportation System.
6. Energy supply.
7. Telecommunication Systems
8. Materials and Supplies Availability and Costs.
9. Climate
10. Government Incentives and Restrictions
11. Cultural and Economic Pecularities.

Factors Affecting Regional Decision:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Customer or constituent and trends.

Labour Availability and Costs.
Degree of unionization.
Construction and land costs.
Utilities Supply and costs.
Transportation System Availability
Transportation Cost
Materials and Supplies Availability and costs.
Climate
Government Incentives

11. Environment Regulations

Factors Affecting Community Decision:

1.
2.
3.
4.
5.
6.
7.
8.
9.

Customer or constituent concentrations and trends.

Preference of Management.
Community Services and Taxes.
Community Attitudes toward New facility Locations.
Labour availability and cost.
Transportation and cost.
Banking Services.
Material Supplies and Availability.
Government Incentives.

Steps in Analysing Service Facility Location Decision:

1.
2.
3.
4.
5.

Consumer behaviour Research.

Market Research.
Data gathering for each location alternative.
Revenue projections for each location alternative.
Profit projections for each location alternative.