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

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