Discuss the location selection criteria for distribution centers, warehouses, and manufacturing plants. How might these factors be considered important when locating a manufacturing facility? How do they differ from the factors considered important when locating a distribution facility?
Facility location refers to choosing the locations for distribution centers, warehouses, and production facilities to facilitate logistical effectiveness and efficiency. The major factors influencing location of the facility are markets and resource availability. Most of the facilities are located near one or the other. Labor and transport services are two other key factors in facility location. Labor is of special significance because it can be considered as both a market in the sense of demand for products and a resource in terms of human resources to staff a particular facility. The transportation system makes other resource factors mobile and allows a firm to combine factors of production that originate great distances apart. Changing trade patterns, spurred in part by multicountry trade alliances, also have a profound influence with respect to the location of distribution facilities.