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GENERAL PROCEDURES FOR FACILITY LOCATION Location of a plant or an organization can be seen as a two step decision.

First, one has to select a region, and second a choice of a site has to be made within the region. The first step depends on the plants long-term strategies like technological, marketing, resource mobilization, and financial strategies. However, the choice of a site within a region can be decided by comparing the relative availability and costs of required resources like: power, transport, labor, water, land, raw materials, in alternative sites. While comparing various sites, one has to take into account both tangible and intangible costs (climate, labor relations, community support, recreational facility, and presence of good schools, etc.) related to the sites. These are all discussed subsequently under the headings: preliminary screening, and selection of exact site. SELECTION OF EXACT SITE Different sites should be compared on the basis of various factors by asking relevant questions on each issues. Some of them are discussed below: Transportation facilities Is the location easily accessible by vehicles from the main highways? Are the railroad facilities sufficient for quick receipt and shipment of goods? Can a railroad siding be made available? Availability of water, power, gas and sewerage Is water available in sufficient quantity and of required quality? Is adequate power available or not? Is gas and sewer system adequate to the plants needs? Soil characteristics Is the bearing capacity of soil suitable to support the building and equipment? Will the soil provide adequate drainage? Drainage Will the area drain away all surface water so that the buildings or work area will not be flooded? Parking space Is adequate space available to provide for employees and visitors vehicles parking? Space for expansion Is enough space available for future expansion of the plant? Accessibility by workers Can the sites be reached by public transport ? Is the road and street network suitable for speedy entrance and exit of employees during rush hours or emergency? Cost of land Does the cost of land justify the selected site for the intended product? Can the location be shifted to some cheaper site with similar facilities? Existing buildings Are the existing buildings suitable for companys operation on rent or final purchase basis? Factors Ratings Factor ratings are used to evaluate location alternatives because (i) their simplicity helps decide why one site is better than another; (ii) they enable managers to bring diverse locational

considerations into the evaluation process; and (iii) they foster consistency of judgment about location alternatives. The following steps are involved in factor rating: Develop a list of relevant factors. Assign a weight to each factor to indicate its relative importance (weights may total 1.00). Assign a common scale to each factor (e.g., 0 to 100 points), and designate any minimums. Score each potential location according to the designated scale, and multiply the scores by the weights. Total the points for each location, and choose the location with the maximum points. Example 2.1. A glass company is evaluating four locations A, B, C, and D for a new plant and has weighted the relevant factors as shown in Table 2.2. Scores have been assigned with higher values indicative of preferred conditions. Using these scores, develop a qualitative factor comparison for the four locations.