‫‪.

‬بسم هللا الرحمن الرحیم‬

FACTORS THAT INFLUENCE
THE PLANT LOCATION.

Presented by : Sir. Raza khan.

Location theories

Alfred Weber’s theory of location of

industries In 1909 developed general theory
of location.
Theory take into consideration theory factors:
1. Transportation cost
2. Labor cost
3. agglomeration and DE agglomeration: agglomeration means sufficient demand
for company. And DE agglomeration means over concentration of industries.
Or
wrong types of industries. Shortage of labor, capital, land….
PLANT LOCATION.
Plant location is refers to the choice of the
region where men, materials, machinery,
and equipment are brought to gathers for
setting up business or factory.

A palace where an industrial or

manufacturing process take place.
NEEDS FOR SELECTING SUITABLE
LOCATION

 WHEN STARTING NEW ORGANIZATION.

 IN CASE OF EXISTING ORGANIZATION.

 IN CASE OF GLOBAL LOCATION.

FACTORS INFLUENCING
PLANT LOCATION.
General Locational Factors.

CONTROLLABLE FACTORS.
Proximity to markets.
1.
Supply of materials.
2.
Transportation facilities.
3.
Infrastructure availability.
4.
Labor and wage.
5.
External economies.
6.
Capital.
7.
PROXIMITY TO MARKETS.
If the industry is nearer to the market then it can grasp the market share by offering
quick services.
SUPPLY OF MATERIALS.
It will reduce the cost of transporting raw material from the vendor’s end to the plant.
TRANSPORTATION FACILITIES.
A suitable transportation is necessary such as roads, water, rail, and air. The transportation costs must be kept low .
INFRASTRUCTURE AVAILABILITY.
The basic infrastructure availability like power ‘water’ and waste disposal are the basic infrastructure availability for plant location.
LABOR AND WAGES.
Labor-intensive firms should select the plant location which is nearer to the source of manpower.
CAPITAL.
Depends on size, type and nature of the firm.
UNCONTROLLABLE FACTORS.

1.Government policy .
2.Climate conditions .
3.Supporting industries and services.
4.Community and labor attitudes.
5.Community Infrastructure.
GOVERNMENT POLICY.
Local bye-laws, taxes, building ordnances, etc.
CLIMATE CONDITIONS.
With the developments in the field of heating, ventilating and air- conditioning, climate of the region does not present much problem. Of course, control of climate needs money.
SUPPORTING INDUSTRIES AND
SERVICES.
Existence of hospitals, marketing centers, schools, banks, post offices, clubs,
etc.
COMMUNITY AND LABOR ATTITUDES.
Success of an industry depends very much on the attitude of the local people
and whether they want work or not.
COMMUNITY INFRASTRUCTURE.
Thank you so much.