Location attributes in case of a industrial area.

1. BY:
P.KRISHNA DUTT -
131109025
ALOK KUMAR TRIPATHI -
131109037
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2. WHY IS LOCATION SO IMPORTANT.?
• TO MAXIMIZE THE BENEFIT OF FIRM; IN TERMS OF
• GEOGRAPHICAL ASPECT,
• , ECONOMICAL ASPECT,
• ENVIRONMENTAL ASPECTS ETC
• TO MAXIMIZE THE PROFIT TO THE CAPITALIST.
• TO DECREASE THE COST OF THE PRODUCT.
• TO SUSTAIN AND INCREASE GROWTH OF THE INDUSTRY.
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3. • LAND.
• TRANSPORTATION.
• ENVIRONMENTAL.
• LEGAL ASPECTS.
• AVAILABILITY OF THE RAW MATERIALS.
• PROXIMITY TO THE MARKET.
• LABOUR FACTORS
SITE RELATED FACTORS
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4. 4
“LOCATION, LOCATION, LOCATION!”
• IN CASE OF INDUSTRIAL ,LOCATION DECISIONS ARE EITHER
DEMAND-PULLED, SUPPLY-PUSHED, OR MORE FREQUENTLY, BOTH
DEMAND-PULLED AND SUPPLY PUSHED.
• DEMAND-PULLED/PUSHED:
• MARKET-RELATED FACTORS SUCH AS THE LOCATION OF
CUSTOMERS, THE LOCATION OF THE COMPETITION,
PURCHASING POWER OF THE CUSTOMER, ROOM FOR EXPANSION
PLAYS A KEY ROLE IN DECIDING A LOCATION .
• INDUSTRIES ARE LIKELY LOCATED IN THE AREAS WHICH HAS
MOST POTENTIAL MARKET.

5. • SUPPLY-PUSHED LOCATION FACTORS
• BASED ON THE COST OF DOING BUSINESS. THE COST OF DOING BUSINESS
MAY BE TANGIBLE OR INTANGIBLE.
• TANGIBLE COSTS INCLUDE THE COST OF SITE AND CONSTRUCTION, THE
AVAILABILITY AND COSTS OF LABOR, TRANSPORTATION COST ,
UTILITIES, TAXES, AND REAL ESTATE COSTS.
• INTANGIBLE COSTS INCLUDE:
• ZONING AND LEGAL REGULATIONS, COMMUNITY ATTITUDES,
PROXIMITY TO PARENT COMPANY’S FACILITIES, EXPANSION
POTENTIAL, LABOR CLIMATE, TRAINING AND EMPLOYMENT
SERVICES, AND THE QUALITY OF LIFE
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6. Qualitative approach for choosing a
location for the firm.
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7. 7
1. DEVELOP A CHECKLIST OF RELEVANT FACTORS
2. ASSIGN WEIGHT TO EACH FACTOR TO INDICATE ITS RELATIVE
IMPORTANCE (TOTAL = 100%)
3. ASSIGN A COMMON SCALE TO EACH FACTOR (E.G., 1-5,
5=BEST), AND DESIGNATE ANY MINIMUM
4. SCORE EACH POTENTIAL LOCATION ACCORDING TO THE
DESIGNATED SCALE, AND MULTIPLY THE SCORES BY THE
WEIGHTS
5. TOTAL THE POINTS FOR EACH LOCATION, AND CHOOSE THE
LOCATION WITH THE MAXIMUM POINTS

8. 8
Location Factors Weight Rating Weighted Score
 Availability of raw materials 25 4 100
 Land and construction costs 20 5 100
 Distance from market 20 4 80
 Transport facility 15 3 45
 Skilled labour 10 1 10
 Govt. incentives and other factors 10 3 30
Total location
score = 365
WHICH OF THESE LOCATIONS IS BETTER?
Location Factors Weight Rating Weighted Score
 Availability of raw materials 25 4 100
 Land and construction costs 20 3 60
 Distance from market 20 3 60
 Transport facility 15 4 60
 Skilled labour 10 1 10
 Govt. incentives and other factors 10 5 50
Total location
score = 340

9. THANK U…….. 
HOPE U HAVE ENJOYED IT…….
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