Location Decisions

Abstract

The sum of the location decisions of a company produce its corporate geography. The location decision for each unit is based on some combination of the location factors discussed previously. The problem might be conceived as simple -- choose the location which will produce the maximum profit. Inreality, the problem is extremely complex, and in an absolute sense unsolvable. There are several complications. The first is that profit is not the only motive in the location of a manufacturing plant or retail store. Other motives include stability and market share. However, even if the profit motive is assumed, is the solution for the short or long run? And how are uncertainties dealt with? Many of the data desired are unavailable or of dubious quality. The actions of suppliers and competitors cannot be forecast with certainty. Future markets can only be guessed.