Principal Factors in Locational Choice:

For an organization, the selection of location based on various factors such like accessibility from suppliers, accessibility to customers, market closeness etc. These factors are categorized into four set of factors:

Fixed Costs

Effected by the design of buildings, layout of facilities, provision and maintenance of departments.

Variable Costs

It is because of the accessibility of labour, raw materials, market, etc.

Revenue Factors

 The factors influencing the demand, i.e. immediacy to customers, usability, accessibility etc.

Subjective Factors

   Factors related to individual preferences, amiability of the district, etc.

The need to choose a location or site for a facility occurs because of the aforementioned factors. Some of the common type of location problems involves adding one of more new entities where they shall interact with the existing facilities. The new entities can be a machine or plant or a warehouse, etc. The critical location problems are following:

Single Facility Location Problem

Here we are concerned with location of facility to serve local community, customers, etc. such like locating a cinema hall, etc. for people.