INDUSTRIAL

ENGINEERING
IMPORTANCE OF PLANT LOCATION &
CHOICE OF SITE
Prepared by:GUIDED BY:ASHAY GOTHI
S.S. GOSAI
(130280119032)

IMPORTANCE OF PLANT
LOCATION

The selection of location is an

important activity for the success of
the business and requires careful
analysis.

The choice of location is vital for new

firm for its success.

SELECTION OF APPROPRIATE
LOCATION IS IMPORTANT DUE TO
FOLLOWING REASONS:

A good location may reduce the cost

of production and distribution to a
considerable extent.

Location of plant determines the

nature of investment cost to be
incurred and also the level of many
operating costs.

Government sometimes plays vital role

in the choice of the location keeping in
view the national benefits.

Probably no location is so perfect as to

guarantee success but bad location can
be so bad as to bankrupt a company.

CHOICE OF SITE FOR

LOCATION
The choice of site for location depends on
two factors.
1. Selection of region:-

Generally the geographical area is divided

on the basis of nature regions or political
boundaries within the nation.
EX:-Maharashtra state and Gujarat state

2.

Selection of locality

After selection of the region the specific

locality within
region is considered . Generally following
alternative
are open in selection of the locality .
i. Urban Area
ii. Rural Area
iii. Sub Urban Area

URBAN AREA

Urban area is the area which is located

in largely populated area . In this type
of area the availability of diversified
labour is high .

In urban area transportation facility is

good and communication facility is also
good.

RURAL AREA

Rural area is the area which is located

largely in outside the urban area .

In rural area banking facility, credit

facility and insurance facility are not
available.

In rural area the communication

facilities are not as good as urban
areas.

SUB-URBAN AREA

Sub-urban area is the area which is located

such as the advantages of both rural and urban
areas are available.

There are some special facility that are

available like tax relaxation , government help,
etc.

In sub-urban area the price of land is less

compared to urban area and more compared to
rural area.

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