Importance of plant Location

Plant location is a strategic decision for the entrepreneur. As plant installation is one time process, site selection plays very important role for the business. The selection of plant locationsite is important because of following reasons:

(1)The location of plant should be nearer to the customers as well as to the suppliers in order to reduce the transportation cost.

(2) For selecting the plant location, physical factors such as Availability of electric power, transportation facility, availability of labor, availability of water etc. must be considered.

(3) Also, political influence and community factor may also effect the plant location. 

(4) conditions such as temperature, humidity, rainfall, probability of flood etc. are to be considered for site selection.

So, selection of plant location is not an easy task, because if wrong site is selected, then all investment in factory building, equipment , its layout etc. will go in waste. Therefore, while selecting a site, entrepreneur must consider many aspects like technical, physical, commercial, and financial with the target to gain maximum advantage.