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    Lecture 17 Factors Affecting Plant Location

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    Sanskar Agrawal
    The document discusses factors that affect the location of industrial plants, including both controllable and uncontrollable factors. Controllable factors are proximity to markets and supplies, transportation, infrastructure, labor availability and wages. Uncontrollable factors are government policy, climate, supporting industries, community infrastructure and attitudes. Key considerations for plant location include access to raw materials and transportation for inputs and outputs, available infrastructure like power and water, and a supportive community and labor force.

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    Lecture 17 Factors Affecting Plant Location

    Uploaded by

    Sanskar Agrawal
    24 views14 pages
    The document discusses factors that affect the location of industrial plants, including both controllable and uncontrollable factors. Controllable factors are proximity to markets and supplies, transportation, infrastructure, labor availability and wages. Uncontrollable factors are government policy, climate, supporting industries, community infrastructure and attitudes. Key considerations for plant location include access to raw materials and transportation for inputs and outputs, available infrastructure like power and water, and a supportive community and labor force.

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    Lecture 17 Factors affecting plant location

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    The document discusses factors that affect the location of industrial plants, including both controllable and uncontrollable factors. Controllable factors are proximity to markets and supplies, transportation, infrastructure, labor availability and wages. Uncontrollable factors are government policy, climate, supporting industries, community infrastructure and attitudes. Key considerations for plant location include access to raw materials and transportation for inputs and outputs, available infrastructure like power and water, and a supportive community and labor force.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    24 views14 pages

    Lecture 17 Factors Affecting Plant Location

    Uploaded by

    Sanskar Agrawal
    The document discusses factors that affect the location of industrial plants, including both controllable and uncontrollable factors. Controllable factors are proximity to markets and supplies, transportation, infrastructure, labor availability and wages. Uncontrollable factors are government policy, climate, supporting industries, community infrastructure and attitudes. Key considerations for plant location include access to raw materials and transportation for inputs and outputs, available infrastructure like power and water, and a supportive community and labor force.

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    of 14

    Lesson 17

    Operations Management
    Factors Affecting Plant Location

    Dr. Inderdeep Singh


    Department of Mechanical and Industrial Engineering

    1
    Factors affecting plant location

    • General locational factors


    - Include controllable and uncontrollable factors for all
    type of organizations

    2
    General location factors
    • Controllable factors
    - Proximity to markets
    - Supply of raw materials
    - Transportation facilities
    - Infrastructure availability
    - Availability of labor and wages
    General location factors
    • Uncontrollable factors
    - Government policy
    - Climate conditions
    - Supporting industries and services
    - Community and labor attitudes
    - Community Infrastructure
    Proximity of markets
     Location of facilities close to the market
    - Provide goods and services at time and reasonable price
    - Reduce the transportation cost

     Location of facilities close to market (based on product)


    - Delicate and susceptible to spoilage
    - Services are promptly required very often
    -Shelf life of the product is low
    Supply of raw material
    In right qualities and at right time in order to have an uninterrupted
    production.

    Availability of raw materials nearer to the plant location decreases


    the transportation cost.

    Examples of some industries in which raw material availability


    should be nearer to plant location sugar, cement, jute and cotton
    textiles
    Transport facility
    Transport facilities are very important for bringing raw materials to
    the factory.

    Transport facilities are very important for finished goods to the


    market

    A place which is well connected by rail, road, air and water


    transport facilities is suitable for plant
    Infrastructure
    • The basic infrastructure facilities are power, water and waste disposal.

    • Certain types of industries are strong power dependent (aluminum and steel)

    • Process industries like paper, chemical, cement require continuous supply of


    water in large amount and good quality.

    • A waste disposal facility for process industries is an important factor, which


    influences the plant location

    8
    Availability of labor and wages

    • Adequate number of labor and with specific skills

    • Cheap manpower need training program which need extra funding

    • Now a days, the influence of skilled labor on plant has lost because of
    mobility

    • Prevailing wage pattern, cost of living, industrial relations and bargaining


    power of the employee unions’ are important considerations

    9
    Government policy
    • The policies of the state governments and local bodies concerning labor
    laws, building codes, safety are the factors that demand attention.

    • Incentive package given by government to entrepreneur in a particular


    location:
    - exemption from a sales tax and excise duties
    - soft loan from financial institutions
    - subsidy in electricity charges
    - investment subsidy

    10
    Supporting industries and services
    • Now a day the manufacturing organization will not make all the
    components and parts by itself

    • The source of supply of component parts will be the one of the factors that
    influences the location.

    • The various services like communications, banking services, professional


    consultancy services and other civil amenities services will play a vital role
    in selection of a location

    11
    Climate
    • It is important for two reasons
    - There are certain industries which mainly
    depends on nature of production
    Example :- Humid climate for Cotton textiles
    and jute
    - Climate also affect the labor efficiency

    12
    Community and labor attitudes

    • Community attitude towards their work and towards the


    prospective industries can make or mar the industry.

    13
    Thank You

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