On account of this consideration many industries have been set up near the source of supply of raw material. Henry Ford started manufacturing motor cars in Detroit because he belonged to that place. This is possible only when the market is not far away. Industries using pure raw material (which do not lose their weight when turned into finished products) may be situated away from the source of such raw materials. The place selected should be such where the raw materials are available easily. Every industrial undertaking is established with the aim to expand in future. The behaviour of the existing buildings or structures neighbourhood may guide in deciding the type and the depth of … Share Your PPT File, Rate of Return Method: Merits and Demerits | Capital Budgeting. But at present, there are several other sources of power, e.g. This becomes a very important element in the design process. Raw material form major proportion of the finished product. Industrial Development and Regulation Act of 1951 laid down clearly certain rules, regulations and formalities to be complied before setting up an industrial unit. Following factors can be explained under this category: For the efficient and smooth running of the business and for meeting working capital requirements, banking facilities play an important role. Plagiarism Prevention 4. The basic aim of selecting a particular mode of transportation should be minimum transportation cost with maximum transportation service. The views to the site as well as the views from the site are to be carefully considered while designing. (ii) Textile factories in Gujarat and Maharashtra. Markets may be national or regional. Business Organizations: There are various types of business organizations that can exist in a country. But both these methods are time consuming and involve a lot of expenditure which ultimately increase the cost of production. Such measures are undertaken by the Govt, in order to ensure balanced and regional growth of industries in India. Industry using third type of raw material can be located anywhere. Transportation 6. Every manufacturing industry requires cheap and efficient means of transportation for the movement of both raw-materials from the source of supply to the factory and finished product from the factory to the markets or the centres of consumption. Carpet industry at Bhadohi and Mirzapur serves a very good example of this kind. Internal arrangements pertaining to fire extinguishers, sand buckets and other firefighting equipment must be arranged. Soil and climatic conditions are very important for the establishment of various type of industries like tea, coffee, rubber and tobacco. On account of this factor, jute industry developed in West- Bengal and tea industry in Assam. Labour cost is one of the main constituents of the total cost of production. Adequate transportation facilities should be available for carrying the material from the source of supply. For example, iron and textile units are situated near the coal supplying centres. (c) raw materials which are not heavy and can be preserved for a longer period of time, e.g., raw cotton. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. These studies and surveys render valuable information which is greatly helpful in establishing and industrial unit in particular region. Copyright 10. (iii) Jute works in Bengal owe their success on account of easy availability of raw-materials. Image Guidelines 5. These days the government plays an important role in determining the location of new industries. Nearness to Sources of Operating Power 4. TOS 7. ADVERTISEMENTS: Factors affecting location of an industrial unit are: (I) Primary factors and (ii) Secondary factors: Decision with regard to location of an industrial unit involves a careful study of many factors. Content Guidelines 2. Factors affecting location of an industrial unit are: (I) Primary factors and (ii) Secondary factors: Decision with regard to location of an industrial unit involves a careful study of many factors. Its ideal location would be Jalandhar, which is a leading publishing centre in Punjab. Another important point in this regard is that means of transportation and communication are more in plains rather than in hilly areas. The area for location should be such as to provide all possible opportunities for future development and expansion of the industrial unit without involving extra cost. Coal is the cheapest source of power, but it is very bulky and involves high transportation costs. Proper and right choice of location is instrumental in future success of the business. Similarly, at Bombay film industry has developed. Share Your PDF File On account of mobility of labour, this factor does not materially affect the location of an industrial unit. STUDY. Labour Supplies 5. TOS4. Climate of a place also considerably affects the efficiency of workers. Site. Carpet industry developed gradually at Mirjapur district of Uttar Pradesh. Manufacturing a thing successfully is not sufficient. An industry should be located in the areas where there are already developed means of transportation. Limited and healthy competition encourages the growth of industrial units in a particular region. It influences the total cost of production. Sometimes personal likes had dislikes also influence location of a particular industrial unit. The number of buyers does not shift the supply curve. Nearness of the market ensures transportation costless and minimum wastage. It is also necessary that the output should find ready market and that the product is sold at a price to yield reasonable profit.

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