Roshan Mani

11ECTEC047

B.Tech. VIII Sem

E.C.E. Deptt.

GCET, Bikaner

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“A Plant should be located at a place where inhabitants are interested in its success, the product can be sold profitably and production cost is minimum.”

- Dr. Vishweshwarya.

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Location Theory is concerned with thegeographical location of economic activities.

It is synonymous to Micro-economic Theory.

Micro-economics is a branch of economicsthat studies the behavior of individuals andsmall impacting organizations in makingdecisions on the allocation of limitedresources.

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Demand, Supply and Equilibrium

Elasticity

Theory of Production

Cost of Production

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Proximity to customers

Business Climate

Total Costs

Infrastructure

Quality of Labor

Suppliers

Political Risks

Government Barriers

Trading Blocks

Environmental Regulation

Competitive Advantage

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Man

Money

Material

Means of Power

Momentum to early start

Market

Motive

Means of Communication

Management

Machinery

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Heavy-manufacturing facilities◦ large, require a lot of space, and are

expensive

Light-industry facilities◦ smaller, cleaner plants and usually less

costly

Retail and service facilities◦ smallest and least costly

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Government stability

Government regulations

Economic stability and growth

Exchange rates

Culture

Climate

Export import regulations, duties and tariffs

Raw material availability

Number and proximity of suppliers

Transportation and distribution system

Labor cost and education

Available technology Technical expertise Cross-border trade

regulations

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Labor

Proximity of customers

Number of customers

Construction costs

Land cost

Financial services

Climate

Modes and quality of transportation

Transportation costs

Proximity of suppliers

Education system

Raw material availability

Commercial travel

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Construction costs

Land costs

Raw material and finished goods shipment modes

Proximity to raw materials

Utilities

Labor availability

E.g. machines, engines parts

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Transportation costs

Proximity to markets

Frequency of delivery required by customer

Land costs

Easily accessible geographic region

Education and training capabilities

E.g. Manufacture of clothes, furniture, consumer electronics and home appliances

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Population

Accessibility

Visibility

Parking

Competition

Safety & Security

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Most efficient way to perform the task.

Develop a valid assessment of the current operations.

Improve Utilization & Productivity.

Present Workflow Process is seen clearly.

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For establishing any service unit we shouldtake into consideration of all the previousfactor which can affect the business unit &according to that select the location whichcan satisfy our most of the needs to run aservice unit.

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