Answer to Question #243810 in Management for Nithya

Question

Location decision for a manufacturing plant has a significant influence towards the success of the business. Imagine that you are going to establish a production plant for a furniture industry in Sri Lanka. Analyze the aspects that need to be considered when establishing the plant using appropriate example

Answer 1

Ideal location of industries is the first fundamental aspect that entrepreneurs ought to consider before deciding on the location of plants. The factors that they ought to consider are: accessibility to raw materials, road and transport network in the area, security, availability of markets, accessibility to the required labour, and other pertinent social amenities.

Accessibility to raw materials

This is the most vital requirement or need that must be met on the first instance. The furniture plant will surely depend on timber as the raw materials in its process. Therefore the entrepreneur must consider whether the raw material is available before setting up the plant in any place in Sri Lanka.

Road, transport and communication network

This is equally vital to ensure proper running of the plant. The raw materials need to be transported from their location to the factory. Equally processed furniture need to be transported to the market. Availability of the transport and communication network will proof to be very vital in ensuring that the processes are effectively done.

Availability of market

Market for the processed furniture is essential in ensuring that the plant keeps up and running. Before the plant location is decided market analysis should be done in order to map out the areas where there is ready market for processed furniture.

Security

Security is another integral need in ensuring safety of the plant and the processed furniture including the unprocessed raw materials. Before a plant is located in an area security analysis should be done so as to ensure that the plant is located in a secure environment.

Accessibility to the required labour

Labour is an essential ingredient in the process of production. It is a critical factor in the factors of production. Before the location of the plant is decided there should be a greenlight that labour in that area is in abundance.