FACILITY LOCATION

MEANING
 Facility location/plant location is the
function of determining location for a
plant for maximum operating economy
& effectiveness. A selection on pure
economic considerations will ensure an
easy & regular supply of raw materials,
labour force, efficient plant layout,
proper utilisation of production capacity
& reduced cost of production.
CONDITIONS……
 When the business is newly started
 Existing business unit has outgrown its
original facilities and expansion is not
possible
 The volume of business necessitates
the establishment of branches.
 A lease expires and the landlord does
not renew the lease
 Cost reduction if possible
 Other social or economic reasons for
instance inadequate labour supply, shift in
market.
ERRORS IN SELECTION
 Lack of thorough investigation
 Reluctance of key executives to move
from traditional established home
ground to new and better locations
 Moving to already congested areas

 Preference for acquiring an existing

structure that is improperly located
STEPS IN LOCATION
SELECTION
WITH IN THE COUNTRY OR OUTSIDE

SELECTION OF THE REGION

SELECTION OF THE LOCALITY

SELECTION OF THE EXACT SITE

DOMESTIC OR
INTERNATIONAL
 Political stability
 Export and import quotas

 Currency and exchange rates

 Cultural and Economic peculiarities

 Natural and physical condition

SELECTION OF THE REGION
 Availability of Raw Materials
 Nearness to the Market

 Availability of Power

 Transport Facilities

 Suitability of climate

 Government Policy

 Competition Between states

SELECTION OF COMMUNITY
 Availability of labour
 Civic Amenities for Workers

 Existence of Complementary and

Competing Industries
 Finance and Research Facilities

 Availability of Water

 Local Taxes and Restrictions

SELECTION OF THE SITE
 Soil, Size and topography
 Disposal of Waste