7 Location Factors For Manufacturing
1) A location Factor is the reason for a factory's placement
2) There are seven location factors involved when a plant is established
2) There are seven location factors involved when a plant is established
Summary
A good example of factory location
When a large factory or corporation is constructed, certain components are necessary for the success of the company and the amount of profit it will receive. These components are called location factors. The 7 location factors as listed are key for the growth of a factory placement in Canada.
The 7 Location Factors
Raw Materials
1) Materials that are important to the business must be located near the source
2) Wherever ore is, the copper mining plant must be nearby.
3) Eg: A potato processing plant must be close to a potato farm (P.E.I)
2) Wherever ore is, the copper mining plant must be nearby.
3) Eg: A potato processing plant must be close to a potato farm (P.E.I)
Markets
1) A company that is close to the consumer population.
- REduces Costs
-Ensures rapid delivery
2) A Company will not locate near it's markets in two cases
- When the market spans over a large area
- Laction is more important
- REduces Costs
-Ensures rapid delivery
2) A Company will not locate near it's markets in two cases
- When the market spans over a large area
- Laction is more important
Availability Of Fresh Water And Power
- Large factories need a good source of water for the manufacturing process
- Steel factories need large amounts of water for the cooling process
- Aluminum needs large amounts of electricity to be fabricated, and therefore must be near a good source
- Steel factories need large amounts of water for the cooling process
- Aluminum needs large amounts of electricity to be fabricated, and therefore must be near a good source
Labour Supply
1) Highly skilled workers are important (near universities and colleges)
2) Availability and cost are important
3) Low cost labour
4) Developing nations have taken away cheap labour
2) Availability and cost are important
3) Low cost labour
4) Developing nations have taken away cheap labour
Transportation
1) An efficient transportation service is vital to get the product to the consumer (eg. Rail, Water, Road)
2) Ships are cheaper and more efficient for bulk industries.
2) Ships are cheaper and more efficient for bulk industries.
Governement
1) Direct - Government encourages investment by offering advantages
-Low taxes, cheap land
2) Indirect - improving infrastructure that will attract businesses
- eg. a new fast highway for a business to be located
-Low taxes, cheap land
2) Indirect - improving infrastructure that will attract businesses
- eg. a new fast highway for a business to be located
Circumstances
1) Less easy to measure than the other factors.
2) Depends on the entrepreneur or whoever puts the idea into practice
2) Depends on the entrepreneur or whoever puts the idea into practice
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