Location decisions

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Location decisions

Factors that affect location decisions Factors that affect the location decisions of a manufacturing firm: For flow production, on the other hand, production will be on a large scale- there will be a huge amount of components and transport costs will be high- so components need to be close by.

Businesses will need to locate near areas where they can get workers of the skills they need in the factory. If lots of unskilled workers are needed in the factories firms locate in areas of high unemployment. Wage rates also vary by location and firms will want to set up in locations where wage rates are low.

There may also be govt. Location decisions business needs to consider these. If goods are to be exported, it needs to be set up near ports.

Location decisions

Power and water supply: Eg; restaurants, hairdressers, post offices etc. They locate away from customers in places where there are low rent and wage rates. If they want certain types of worker skills, they will need to locate in places where such skilled workers can be found.

However, with work-from-home and technology, this is not that big of a factor nowadays. Nearness to other business: Businesses may also set up where close competitors are to watch them and snatch away their customers.

Being near competitors also helps keep an eye on competition and snatch away customers. Availability of suitable vacant premises: Obviously, there needs to be a vacant premise available to set up the business.

Vacant premises can also help the business expand their premises in the future. Access to delivery vehicles: Shopping complexes with security guards will thus be preferred by firms. Why businesses locate in different countries?

Cheaper or new raw materials available in other countries. Availability of government grants and other incentives Avoid trade barriers and tariffs: The role of legal controls on location decisions Governments influence location decisions: Grants and subsidies can be given to businesses that set up in such areas.

Planning restrictions can be put into place to do so.The distribution side of the supply chain is nearly a mirror image of the sourcing decision, but it is driven by the location of high-value customers, not low-cost manufacturers.

While the milestones are generally the same for most projects, the key factors considered in the decision-making process may be weighted differently, depending on the type of project, the company's culture, the required work force for the location, and other key objectives established by the company for the project.

making location decisions Procedure for Making Location Decisions As with capacity planning, managers need to follow a three-step procedure when making facility location decisions.

Location decisions

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