Types of Facilities : Heavy-manufacturing facilities :- Large, require a lot of space, and are expensive Light-industry facilities :- Smaller, cleaner

r plants and usually less costly Retail and service facilities :- Smallest and least costly. Factors in Heavy Manufacturing Location : Construction costs . Land costs . Raw material and finished goods shipment modes . Proximity to raw materials. Utilities. Labor availability.

Factors in Light Industry Location : Transportation costs Proximity to markets Frequency of delivery required by customer Land costs Easily accessible geographic region Education and training capabilities.

Factors in Retail Location : Proximity to customers Location is everything.

Government stability Government regulations Political and economic systems Economic stability and growth Exchange rates Culture Climate Export import regulations, duties and tariffs Raw material availability Number and proximity of suppliers Transportation and distribution system Labor cost and education Available technology Commercial travel Technical expertise Cross-border trade regulations Group trade agreements.

Labor (availability, education, cost, and unions) Proximity of customers Number of customers Construction/leasing costs Land cost. Modes and quality of transportation Transportation costs Community government Local business regulations
Government services (e.g., Chamber of Commerce).

Business climate Community services Incentive packages Government regulations Environmental regulations Raw material availability Commercial travel Climate.

 Infrastructure (e.g., roads, water, sewers)

Quality of life Taxes Availability of sites Financial services Community inducements Proximity of suppliers Education system

Tax credits Relaxed Government regulation . Job training. Infrastructure improvement Money.

-:PROPER SERVICE SECTOR LOCATION : Retail. Hospitality Sector. Education. RETAIL

Understand the audience you plan to serve and how many of them live in the area of the location. Determine if those people will walk by your store or drive. If they drive, make sure there is adequate parking in the area. Find out if your target group is growing as quickly as you want your business to grow. Finally, make sure the target group is financially able to afford what you sell. Make sure your target audience comes to the area during the times that you plan to be open and that they shop rather than simply browse. This is important, because a mall location may deliver just the right audience, but many people there are just window shopping or meeting with their friends.

 Determine that the location under review is accessible to your target group. If it is not, determine what it might take in extra marketing costs to attract those individuals. If your direct competition is not hampered by such a problem, consider another location. Discuss your intention with other retailers in the location's area because they generally will share information with you. For instance, many retailers seem to do well in malls, but you may learn they do not because of the high rents and charges they must pay. Or they might share information about when are the busiest times, how much people spend and other useful information. Check out your direct competition. Find out how much they rely on location. Try to figure how you can best compete with them, whether it be by offering your customers a broader product line, lower prices or better service. Then you can overlay that information on your choice of location. Think about using a retail property consultant if you lack the necessary experience to make final location decisions or to negotiate the terms of the lease. As a retailer, you should stay focused on as many retail locations as possible.

HOSPITALITY :EDUCATION :Professional Environment .

-:PROPER MANUFACTURING PLANT LOCATION :-:PLANT LOCATION METHODS : FACTOR RATING SYSTEM TRANSPORTATION METHOD OF LINEAR PROGRAMMING CENTROID METHOD

Plant Location Methodology: Factor Rating Method Example Two refineries sites (A and B) are assigned the following range of point values and respective points, where the more points the better for the site location. Major factors for site location Fuels in region Power availability and reliability Labor Climate Living condition Transportation Water Supply Climate Supplies Tax policies and laws Pt. Range 0 to 330 0-200 0-100 0-100 0-50 0-10 0-50 0-60 0-20 Sites A Sites B

Plant Location Methodology: Transportation Method of Linear Programming Transportation method of linear programming seeks to minimize costs of shipping n units to m destinations or it seeks to maximize profit of shipping n units to m destinations.

Plant Location Methodology: Centroid Method The centroid method is used for locating single facilities that consider existing consumption centers, their coordinates and the volumes of goods to be shipped to them from the new plant. This methodology involves formulas used to compute the coordinates of the twodimensional point that meets the distance and volume criteria as VxD for optimization.

Cx =

d V V
ix i

Cy

d V = V
iy i

Where: Cx = X coordinate of centroid Cy = Y coordinate of centroid dix = X coordinate of the ith location diy = Y coordinate of the ith location Vi = volume of goods moved to or from ith location.

Centroid method example

Several Z-mobile showrooms are located according to the following grid which represents coordinate locations for each showroom

Y Q
(790,900)

S howroom

No of Z-Mobile s s old pe r month 1250 1900 2300

D
(250,580)

A D
X

A
(100,200) (0,0)

DECISION MATRIX FORMULATION

Each 71 AHP short-listed criterion (mentioned in the AHP Analysis post) should be rated against every criteria with respect to the stated goal (Selection of the manufacturing plant location) and each plant locations against all other plant locations with respect to every 71 criterion. The following methodology should be followed to calculated the "Normalized Eigen Vector"
CRITICAL CRITERIA w.r.t. GOAL

GOAL(Selection of best location for the manufacturing plant in TARGET COUNTRY)

The following numbers are only for the demonstration purpose. Its authenticity is not endorsed by me.

Based on the above rating decision matrix formulation should be done as shown below.

SUGGESTION FOR BEST PLANT LOCATION As we saw the this AHP Analysis proposes Baddi (Himachal Pradesh) as the best location followed by Chennai (Tamilnadu), Gurgaon (Haryana), Hyderabad (Andhra Pradesh), Pantnagar (Uttaranchal), Pune (Maharashtra), Baroda (Gujarat), Ludhiana (Punjab), Bangalore (Karnataka) and Ghaziabad (UP). AHP suggested Baddi (Himachal Pradesh) as the best plant location for Your Company Your product manufacturing in Target country.

NORMALIZED PRINCIPAL EIGEN VECTORS

The relative priorities of the selected criteria are given by their respective Eigen vectors. The highest priority corresponds to the biggest eigenvector. In order to synthesize the various priority vectors, these vectors are weighted with global priority of their parent criteria, a higher level in AHP hierarchy. These overall, relative priorities indicate the degree to which the alternatives contribute to the GOAL. These priorities represent a synthesis of the local priorities (lower level in AHP hierarchy) and reflect an evaluation process that permits to integrate the perspectives of the various stakeholders involved. The detailed priority rankings were collected from your Companys mutually exclusive functional experts. After synthesis, the final Eigen vectors of all the criteria should be calculated which have been used for the final selection of the plant location.

The above scale should be used to rate each criteria against all other criteria with respect to the stated goal (Selection of the manufacturing plant location) and each plant locations against all other plant locations with respect to every criterion. Horizontal rows were compared with Vertical columns while rating.

AHP Analysis

AHP is a structured technique for dealing with complex decision. Rather than prescribing a correct decision, the AHP helps the decision makers to find the one that best suits their needs and their understanding of the problem. The AHP provides a comprehensive and rational framework for structuring a decision problem, for representing and quantifying its criteria, for relating those criteria to overall goals, and for evaluating alternative solutions. The 4 level of AHP hierarchy is described above. For description purpose criteria (level-2) and sub-criteria (level-3) has been merged into single level. The criteria weight-age will include the local weight-age of sub-criteria. There are 9 criteria and total 71 sub-criteria have been shortlisted which should be analyzed for multi-criterion decision making process. The general critical factors of industrial location are transportation, labor, raw materials, markets, industrial sites, utilities, government attitude, climate and community. You need to identify several data which should be used while analyzing AHP. Some of those are described below. Please follow these and try to find out the State govt. incentives, state infrastructure status, state social status etc. State social status is mentioned below. These are the following 71 critical sub-factors listed under their 9 respective critical factors.

Transportation 1. Availability of airways facilities 2. Availability of highways facilities 3. Availability of railways facilities 4. Availability of trucking services 5. Availability of water transport 6. Cost of inbound and outbound transportation
Labour

1. Availability of skilled labour 2. Amount of Wage rates 3. Availability of unskilled labour 4. Nonexistence of unions 5. Educational level of labour 6. Dependability of labour 7. Availability of male labour 8. Availability of female labour

9. Cost of living (housing) Raw Material 1. Availability of raw material and components 2. Closeness to materials and components 3. Availability of storage facilities for materials and components 4. Location of suppliers Markets 1. Proximity to markets 2. Anticipation of growth markets 3. Shipping costs to market areas 4. Availability of marketing services 5. Attainment of favorable competitive position 6. Income trends 7. Population trends 8. Consumer characteristics 9. Location of competitors 10. Future expansion opportunities 11. Size of market Industrial site 1. Cost of industrial land 2. Cost of developed industrial park 3. Acreage required 4. Availability of space for future expansion 5. Insurance rates 6. Availability of lending institutions 7. Closeness to other industries

Utilities
1. Availability of Telecom services 2. Cost of telecom services 3. Adequacy of water supply 4. Quality of water supply 5. Availability of disposable facility for industrial waste 6. Availability of fuels 7. Cost of fuels 8. Availability of electric power 9. Cost of electric power Government attitude 1. Political stability 2. Political conflict 3. Pro-development attitude 4. Corruption level 5. Crime rate

6. Terrorism 7. Income tax exemption incentives 8. Compensation laws 9. Insurance laws 10. Safety inspections 11. Local employment law 12. Nuisance and stream pollution laws 13. State sales tax Climate 1. Living conditions 2. Relative humidity 3. Monthly average temperature 4. Air pollution Community 1. Availability of colleges 2. Availability of schools 3. Availability of recreational facilities 4. Availability and quality of medical centers 5. Availability and quality of shopping centers 6. Availability of hotels 7. Availability of banks and credit institutions 8. Community position of future expansions

Mathematical Analysis
LOGISTICS COST DETAILS This is a simplified supply chain network for your product business in Target country.

Try to get the INBOUND DETAILS, OUTBOUND DETAILS, FIXED COST DETAILS versus PLANT CAPACITY and then build mathematical model.

After solving the Linear Programming for the above mentioned capacitated plant location model , you will find the similar results as shown here. These numbers are the only indicator of your product shipped from supply regions to corresponding destinations. In the last column (Plants), number 1 or 0 (zero) are the indicators for opening or closing a plant respectively. ( These are the indicative numbers for demonstration purpose)

The capacitated plant location model solves for the minimum total cost and suggests the plant location by applying Linear Programming. As shown, this model suggested 7 plant locations out of 10 choices. The suggested plant location, which will cost to INR 110990.85 per unit of your product to meet the entire Target country demand are as follows: 1. Pune, Maharashtra 5. Hyderabad, Andhra Pradesh 2. Gurgaon, Haryana 6. Chennai, Tamilnadu 3. Ludhiana, Punjab 7. Baroda, Gujarat 4. Ghaziabad, UP

-:QUESTIONNAIRE FOR BUSINESS LOCATION:1. Is the facility located in an area zoned for your type of business? 2. Is the facility large enough for your business? Does it offer room for all the retail, office, storage or workroom space you need? 3. Does it meet your layout requirements?

4. Does the building need any repairs? 5. Do the existing utilities-lighting, heating and cooling-meet your needs or will you have to do any rewiring or plumbing work? Is ventilation adequate? 6. Are the lease terms and rent favorable? 7. Is the location convenient to where you live? 8. Can you find a number of qualified employees in the area in which the facility is located? 9. Do people you want for customers live nearby? Is the population density of the area sufficient for your sales needs? 10. Is the trade area heavily dependent on seasonal business? 11. If you choose a location that's relatively remote from your customer base, will you be able to afford the higher advertising expenses? 12. Is the facility consistent with the image you'd like to maintain? 13. Is the facility located in a safe neighborhood with a low crime rate? 14. Is exterior lighting in the area adequate to attract evening shoppers and make them feel safe? 15. Will crime insurance be prohibitively expensive? 16. Are neighboring businesses likely to attract customers who will also patronize your business? 17. Are there any competitors located close to the facility? If so, can you compete with them successfully? 18. Is the facility easily accessible to your potential customers? 19. Is parking space available and adequate? 20. Is the area served by public transportation?

21. Can suppliers make deliveries conveniently at this location? 22. If your business expands in the future, will the facility be able to accommodate this growth?