Location Decisions

• Major Facility Decisions:
  1. Additional Building Nearby
     • Retain workforce and location preference
     • High fixed costs that can’t be shifted
     • Lack of other alternatives
     • More expensive to manage
  2. Merge multiple facilities in one nearby
     • Retain workforce and location preference
     • Cost savings by consolidation, scale economics
     • Upgrade operation, equipment and facility
     • Recommitment to area
  3. Relocate entire operation to new area
     • Business restructuring or repositioning
     • Achieve lower costs
     • Control surroundings (green acres)
  4. Clusters
     • Go where the competition is
     • Logical for similar companies to make similar location decisions
     • Lower transaction costs
     • Greater mass leads to lower cost of inputs and ideas
  5. Why Companies Move
     • Growth
     • Schools
     • Cost of Housing
     • Workforce
     • Strategic Location
     • Lower Prices