There are many factors that firms will consider when deciding where to locate facilities. Some of them include:
- Availability of workers. Firms need to locate facilities in places that have sufficient numbers of workers with the proper level of education.
- Cost of labor. Firms often locate in places where they can get cheap labor.
- Geographical location. Firms will consider how far the facility will be from the resources it needs and from the customers it serves.
- Cost of resources like electricity or water. This is very important for firms that use large amounts of such things. For example, a company like Microsoft will want to locate huge data centers (which use tremendous amounts of power) in places where electricity is cheap.
Please follow the link below for a discussion of more factors.