Constant research and experimentation is undertaken to develop products and improved methods of production. Another important point in this regard is that means of transportation and communication are more in plains rather than in hilly areas. Purchasing power of the people and composition of population in that region should be carefully studied. For example, iron and textile units are situated near the coal supplying centres. Availability of skilled and efficient labour is mainly responsible for the development of various industries in a particular region e.g., cotton textile industry of Great Britain developed at Lancashire mainly on account of availability efficient labour. Similarly, at Ludhiana a few hosiery units started in the beginning, now Ludhiana has become a very big hosiery articles producing centre in India. The supply of un-skilled labour does not create any serious problem because such labour is available everywhere. In addition to the factors discussed above cost of land and building for setting up the factory topography of the area; the possibilities of future expansion etc., are some other factors which influence the decision-making regarding location of industry. These studies and surveys render valuable information which is greatly helpful in establishing and industrial unit in particular region. Nearness of the market ensures transportation costless and minimum wastage. (c) raw materials which are not heavy and can be preserved for a longer period of time, e.g., raw cotton. electricity, gas, oil and water power etc. Search. This is possible only when the market is not far away. It is easier and cheaper to produce a film in Bombay than in any other part of the country. In order to develop industries on sound lines, Govt, has declared certain areas as industrially backward or special economic zones. Content Filtrations 6. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. If however, the entrepreneur acts rationally and his necessary knowledge he will choose the location which offers the lowest cost per unit of output. Certain industries for their successful working require a special type of climate. Start studying Site. What materials are available in and around the site, which can be used in the design. Similarly is the case in certain other states where, on account of political disturbances, manufacturers have started thinking to settle elsewhere and further industrial expansion has been greatly affected. Industries requiring highly skilled labour have to select such sites which ensure adequate and regular supply of required labour. Copyright 10. Image Guidelines 5. The area for location should be such as to provide all possible opportunities for future development and expansion of the industrial unit without involving extra cost. Report a Violation, Factors Affecting the Location of an Industrial Unit: (i) Primary and (ii) Secondary, Plant Location: 11 Factors that Influence the Selection of Plant Location, Production Planning: it’s Meaning and Objectives. Nearness to raw material is important in case of heavy and bulky materials having lesser value such as coal and other weight losing materials. This is because banking has become indispensable part of modern business. The production of goods is undertaken with the aim of selling them quickly which is possible only on account of nearness to market. ADVERTISEMENTS: Factors affecting location of an industrial unit are: (I) Primary factors and (ii) Secondary factors: Decision with regard to location of an industrial unit involves a careful study of many factors. Modern industrialisation could not have been possible without the growth of hydroelectric generating units. TOS4. Proper and right choice of location is instrumental in future success of the business. Nearness to market is important in case of industries producing consumer goods rather producers’ goods, this is because production of consumer goods require constant adjustment of manufacturing programme on account of quick changes in the tastes, preferences and buying habits of the consumers. Efficient workers are found in cool climatic regions. There should be an easy approach to the place of raw-materials. Sugar factories in Uttar Pradesh, Textile units in Maharashtra and Gujarat, Cement factories in Madhya Pradesh and Jute industry in West-Bengal. On account of this factor, jute industry developed in West- Bengal and tea industry in Assam. Chapter 10 A&B Learn with flashcards, games, and more — for free. Nearness to Sources of Operating Power 4. Besides transportation, communication services are also used to be of immense importance in deciding the location of an industrial unit. That is why industries have developed largely in plains rather than in hilly areas. egear7. In modern times different modes of transportation and their increased efficiency and flexibility have provided ample choice to the industrialists in the matter of location. Manufacturing a thing successfully is not sufficient. Industrial Inertia and Others. Certain cash incentives and concessions are also given by Govt, in order to promote a particular industry in a particular region. Availability of cheap power and fuel supply sources is another decisive factor in selecting proper location of an industrial unit. Internal arrangements pertaining to fire extinguishers, sand buckets and other firefighting equipment must be arranged. Studying competitor websites can give you a good sense of some of the weaknesses in the design that you might be able to overcome. Finance 7. This is another important factor affecting industrial location. But such personal likes and dislikes cannot influence location of an industrial unit in the long run. On the other hand workers from tropical regions are not generally so efficient. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Business Organizations: There are various types of business organizations that can exist in a country. Skilled labour is available only at specific centres. Sometimes personal likes had dislikes also influence location of a particular industrial unit. Create. The main aim of any industrial undertaking is to have maximum production with minimum cost. In certain type of industries transportation is the sole factor which is taken into consideration in deciding location of an industrial unit. Labour cost is one of the main constituents of the total cost of production. Content Guidelines 2. The factors that influence supply shift the supply curve from its original position. A guiding principle should be followed in this regard i.e., “higher the proposition of the cost of raw materials to the total cost, the greater is the possibility of choosing a site near the source of raw materials.”. In case of rural and small scale industries, banks and financial institutions play an important role and provide invaluable service in order to cater their financial needs. Every industrial undertaking is established with the aim to expand in future. Share Your PPT File, Rate of Return Method: Merits and Demerits | Capital Budgeting. In case there arises the necessity of calling fire brigades, proper preparations must be made for the same. The place selected should be such where the raw materials are available easily. There is a complete industrial atmosphere. Henry Ford started manufacturing motor cars in Detroit because he belonged to that place. On account of development of internet, mobile phones etc., this factor does not affect the location of plant now a days. TOS 7. Industries using pure raw material (which do not lose their weight when turned into finished products) may be situated away from the source of such raw materials. The number of buyers does not shift the supply curve. Content Guidelines 2. Log in Sign up. Markets may be national or regional. The behaviour of the existing buildings or structures neighbourhood may guide in deciding the type and the depth of … Soil and climatic conditions are very important for the establishment of various type of industries like tea, coffee, rubber and tobacco. Not only men, but women and children have also engaged themselves in this industry directly or indirectly. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Climate also affects the efficiency of labour. Alford Weber has given another type of raw materials called ubiquitous like clay sand and water which are found everywhere and as such do not affect the location of an industry. Industrial Development and Regulation Act of 1951 laid down clearly certain rules, regulations and formalities to be complied before setting up an industrial unit. Transportation is the life line of modern industry. No productive activity is possible without the availability of adequate capital. Areas which are frequently subjected to earthquakes and other natural calamities may not attract many industries. Disclaimer 9. Labour implies both the skilled and unskilled workers needed for different types of activities. Location of any industry may sometimes be decided according to the personal preferences and prejudices of the industrial enterprises. Availability of Raw-materials 2. This becomes a very important element in the design process.