“The ideal location of a plant is that where the unit costs of production and distribution are at minimum and the prices and volumes of sales are such that maximum profit occurs”
The selection of a place for locating a plant is one of the problems perhaps the most important which is faced by an entrepreneur while launching a new enterprise. The selection may be on PURE ECONOMIC considerations will ensure an easy and regular supply of raw materials, labor force, efficient plant layout, proper utilisation of production capacity and reduced cost of production. An ideal location may be one which will result in the smooth working of the organisation. A bad location on the other hand is a severe Handicap for any enterprise and it finally closes. It is therefore very essential that utmost care should be exercised in the initial stages of site selection. Once a mistake is made in locating a plant it becomes extremely difficult and costly to correct it Need for selection of site becomes obvious from the following points.
When a new business is to be commenced.
The existing unit has outgrown, necessitating expansion.
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