B.B.A-SEM-2-GSI-Location of industries

B.B.A-SEM-2-GSI-Location of industries

• 1.
  By Kunal Upadhyay
• 2.
  The ideal locationis that which permits the lowest cost in production and distribution cost. An ideal location where all types of costs of business activities are the minimum.
• 3.
  Seasonal changesSeasonal changes Due to the seasonal change in regions Cycling changesCycling changes  Depression Recovery Prosperity Recession Secular changesSecular changes  Long term changes Structural changesStructural changes  Due to development of new resources & technology
• 4.
  Factors relating toproductionFactors relating to production  Availability of raw materials  Availability of labour supply  Availability of power  Transport facilities  Financial facilities  State control  Labor laws and labor union  Cost of land and building  Suitable climate
• 5.
  Association with otherIndustriesAssociation with other Industries  Complementary Industries  Competing Industries  Rival firms in the same industries Factors relating to sellingFactors relating to selling  Nearness to market  Population  Fashion Others factorsOthers factors  Personal consideration  Strategic factors  Govt.
• 6.
  Alfred Weber, aGerman economist, presented a theory of location in 1909 In year 1929 his work translated into English Language a theory of industrial location in which an industry is located where it can minimize its costs, and therefore maximize its profits.
• 7.
  Sources of rawmaterial Situation of market There is perfect market competition Availability of labours Interest rate, insurance cost and tax rate are ignored The political, cultural and economics system remains the same
• 8.
  the location theowner’s desire to minimize THREE categories of cost:  Transportation:Transportation: the site chosen must entail the lowest possible cost of  A) moving raw materials to the factory  B) finished products to the market
• 11.
  Labour:Labour: higher labourcosts reduce profits, so a factory might do better farther from raw materials and markets if cheap labor is available  (e.g. China – today) Labour Cost Index Location weight
• 13.
  Agglomeration:Agglomeration: when a largenumber of enterprises cluster (agglomerate) in the same area (e.g. city), they can provide assistance to each other through shared talents, services, and facilities  (e.g. manufacturing plants need office furniture)