Location Evaluation Methods:

There are four basic methods for evaluating a certain location viz. the factor rating method, location break-even analysis method, the centre of gravity method and the transportation method.    

The Factor Rating Method

In factor rating method quantitative and qualitative both factors are utilized for evaluating a location. Generally, some factors are more important than others, thus weights are assigned to these factors whereas solving location problem. This method is more popular because a wide range of factors from education to recreation is considered in this method.

The factor rating method has five fundamental steps:

(a) Develop a list of relevant factors effecting the location.

(b) Assign weights to the factors considered for evaluation.

(c) Produce a scale for each factor (for instance 1-10, 1-100).

(d) Allot a score to each location for each factor, utilizing the scale developed in the above step.

(e) Multiply the score by the weight for each of factor of each location.

(f)  At last, make a reference based on the score evaluated for each location.