PLANT LOCATION Plant location means the establishment of particular Industrial unit at any particular place.

Plant location decisions are the long term program decisions usually taken at a top level management. Plant location decision invoices a heavy commitment of resources and for a very long time. Location decision has to be taken in the case of new business or sometime in the case of old business also. An ideal plant location is not the guarantee of success but it reduces the uncertainty. A good location decision would be where will get new material, labour fuel, power etc. in minimum cost & time the management must try to locate the plant location which will develop the balance b/w the different factor affecting plant location the success or the failure of the organization very much depends on the location of the plant. Factor Affecting Plant Location 1. 2. 3. 4. 5. 6. 7. Availability of Raw Material. Availability of Labour. Transportation & Communication facilities. Fuel & Power. Nearness to the market. Favorable climate. Other consideration lit Law & Taxes, Standard of living, Civil facilities.

Economic Analysis 1. 2. 3. 4. Point Rating Method. Rating plan Method. Product / Factor rating Method. Qualitative Technical Method.

Advantages & Disadvantages URBAN AREA Advantages 1. Transportation facilities are available for the movement of raw material & finished products.

2. Deficient storing facilities including cold storage are available. 3. Good & prompt postal & communication facilities are available. 4. Development of the training institute for the workers and management are easy available. 5. Availability of skill and unskilled labour . 6. Banking & credit facilities are available. 7. Certain specific municipal services are available only in city area like water supply, fire fighting facilities, sufficient police protection etc. Disadvantages 1. 2. 3. 4. The cost of land is very high. Due to high standard of living in city area, the cost of labour is relatively high. The rates of taxes are relatively high in city area. The trade union is very strong

RURAL AREA Advantages 1. 2. 3. 4. As compare to city area the land is available at chipset rate. Due to lower standard of living, the rates of labour are relatively lower. The municipal restrictions which are found in city area are not applicable in rural area. The labour force is more stable in rural area as compare to urban area.

Disadvantages 1. Transportation facilities are not available in good condition and sufficient in rural Area. 2. Banking & credit facilities are not available properly. 3. It is very difficult work to get skilled workers in rural area. Sometimes the services of post & telegraph and means of communication are not available. 4. This is absence of recreation facilities, educational institutes and sufficient medical facilities in rural area. 5. Storing and warehousing facilities are not available in good condition and sufficient quantity.