A mathematical model for industrial projects location

The location of an industrial project is one of the major decisions an entrepreneur has to take. The classical approach in locational analysis is based on cost minimization (especially the aggregate transport cost). Later investigations have dealt with profit maximization. This paper presents the method of developing a comprehensive model for determining the optimum plant location for an industry—considering both the objective (quantitative) factors and the subjective (non-quantitative) factors. The approach followed here identifies all the objective factors and the subjective factors at the micro level and optimizes the overall benefit to the entrepreneur. A method has been devised to evaluate the intangible factors and to combine them with the tangible factors to obtain the overall locational measure. This is done by converting the factors into consistent and dimensionless indices for comprehensive evaluation. Thus the model presented here can be used as a tool to determine the optimum plant location for a new industrial project and also to establish priorities among the feasible plant locations.