Plant Location

Location ultimately has the power to make or break a companys business strategy. (McKinsey)

Objectives

Maximizing potential profits Have competitive advantage

Procedure for making decisions

Decide on criteria Identify crucial factors Develop location alternatives Evaluate each alternative

Factors affecting location decision

Availability of raw materials Proximity to market Proximity to suppliers Availability of power Transportation facilities Climate Government policy

Availability of labor Civic amenities Existence of ancillary industries Availability of water Local restrictions Disposal of waste Community attitude

Foreign site
Political stability Export and import quotas Exchange rates Cultural and economic considerations Availability of natural resources Cost of labor

Evaluating location alternatives

Factor rating method Locational break-even analysis (CPV) Qualitative factor analysis method Center of gravity method