Dt.3.2.

23
Ananta Prasad Nanda
Faculty of IBCS
Sub.:POM
Outline for Today:
Plant Location Need and Factors
Plant Location:
Plant location refers to the choice of region and
the selection of a particular site for setting up
a business or factory.
Benefits Of Plant Location:
 (i)Location influences plant layout facilities
needed.
 (ii) Location influences capital investment and
operating costs
Need Of Plant Location Study:
 When the buss. is newly started
 The existing buss. has outgrown its original facilities
and expansion is not possible and hence
 The vol. of buss. or the extent of market
necessitates the establishment of branches.
 A lease expires and the landlord does not renew the
lease
 Chances of reducing Manufacturing cost by shifting
one to other location.
 Other reasons like inadequate labour supply ,shifting
of Market,etc.
Factors Affecting Plant Location Study:
 Within the country/Outside
 Selection of the Region
 Selection of the Locality/Community
 Selection of the Exact site
Within The Country/Outside:
It Depends on the factors like :
 Political Stability
 export and import quotas
 Currency and exchange rates
 Cultural and economic condition
 Natural and physical condition etc.
Selection of Region:
It depends on the following sub-factors like:
 Availability of Raw Materials
 Nearness to Market
 Availability of Power
 Transport Facility
 Suitability of Climate
 Government Policy
 Competition between State
Selection of Locality and Community:
It depends on the following sub-factors like:
 Availability of Labour
 Civic amenities for workers
 Existence of Complementary and Competing
Industry
 Finance and Research Facility
 Availability of Water and Fire fighting facility
 Personal Factors
Selection of the Site:
It depends on the following sub-factors:
 Soil,size and Topography
 Disposal of Waste

The selection of site should be selected in the

midst of a good scenery, where the question
of beauty should not be ignored.
Methods for Plant Location:
a. Factor Rating Method
b. Point Rating Method
c. Break-Even Analysis
d. Quantitative Factor Analysis