PLANT LOCATION

Meaning of plant location--Plant means a production unit where raw materials are converted into finished goods with the help of manpower, machinery and other facilities. Plant location refers to the specific place where the plant is to be located. Location may be defined as a particular area \site selected for setting a manufacturing unit or plant. The location has to be convenient \appropriate for its manufacturing unit. The decision is a responsible and a delicate one. Location is one of the factors which determine efficiency, stability and profitability of a business unit .An industry is said to be localized in a particular area when large number of industrial units are established .for example textile industry is localized in Mumbai and Ahmedabad. Contd2/-

2 Steps in the selection of location---There are three steps in the selection of location. A) Selection of region B) Selection of locality C) Selection of exact site A) Selection of region--This is the first step in the location of a business unit. The factors taken into consideration are a) Closeness to the market . b) Availability of raw materials. c) Availability of transport and communication facilities.

d) Availability of power , fuel and water. Contd3/3 e) Other factors such as suitable climate , proper law and order situations and existence of congenial industrial atmosphere. B) Selection of locality--It is the second step in the selection procedure. Selection of locality is within the region selected. The factors taken into consideration are--a) Adequacy of labor as per the quality and the quantity required. b) Prevailing wage scales in the industry. c) General attitude of the community towards the industry. d) The types of industries available in the locality. e) Government restrictions and tax burden etc. C) Selection of site ---

This is the third and the last step in the selection procedure. Maximum care should be taken while selecting the exact site for locating a plant \ production unit. Contd..4/4 The factors taken into consideration are--a) Availability of land , the price of the land and the topography of the site. b) Availability of transport facilities i.e. roads and railways. c) Adequacy of water and power supply. d) Facilities for disposal of waste and effluents. e) Favorable surroundings of the site. Prosperity A state of affairs in which the real income consumed, real income produced and level of employment are high or rising and there are no idle resources or unemployment workers or very few of either . The prosperity phase comes to an end when the forces favoring expansion become progressively weak. In view of high profits and business optimism the shortage

Hence entrepreneurs become over pessimism . Thus , prosperity digs its own grave.