When the business is newly started When the expansion to the existing plant is not possible When a firm

wants to establish new branches When the landlord does not renew the lease For social or economic reasons like inadequate power supply, government regulations, etc.

1. 2. 3.

The location of a facility will fix the production technology and cost structure The significance of facility location depends on the size and nature of the business The location of the facility affects the companys ability to server its customers quickly and conveniently


Transportation and Communication Facilities Nearness to Market Availability of Labour Requirements of Material Climatic Conditions Other Considerations


DEFINE THE LOCATION OBJECTIVES AND ASSOCIATED CONSTRAINTS IDENTIFY THE RELEVENT DECISION CRITERIA RELATE THE OBJECTIVES TO THE CRIETERIA USING APPROPRIATE MODELS DO FIELD RESEARCH TO RELEVENT AND USE THE MODELS TO EVALAUATE ALTERNATIVE LOCATIONS SELECT THE LOCATION THAT BEST SATISIFES THE CRITERIA


COST PROFIT VOLUME OR BREAK EVEN ANALYSIS QUALITATIVE METHOD Tangible as well as intangible factors WEIGHT METHOD RANKING METHOD