Jai Hind Industries is planning to set up a new plant. Following, is a table showing alternative locations and respective costs (in Rs.):

Location Cost 5

Transport, per unit 1.00 1.50 1.35 1.65 1.70 Power, per unit 1.25 0.65 1.05 1.20 0.75 Land* 50 lakh 35 lakh 40 lakh 20 lakh 30 lakh Buildings Construction* 130 lakh 110 lakh 120 lakh 90 lakh 100 lakh Equipment (depreciation expense), per unit 2.50 2.80 2.00 3.00 4.50 Location taxes, etc. 10 lakh 8 lakh 12 lakh 9 lakh 20 lakh Wages (average), per unit 0.90 1.00 1.40 0.90 0.80

* To be costed at 15% per annum.

If the volume of production is to be 5,00,000 units, what is the preferred location? If the volume is expanded to 7,00,000 units, would the decision change?

If the locations are rated for some factors as given below, would the earlier decisions change?

Factor Location Industrial relations Climate Skills Availability Quality of Life Geographical Climate 1 Excellent OK Good OK 2 Good Good OK OK 3 OK Excellent Good Excellent 4 OK OK Excellent Excellent 5 Excellent Good Excellent Excellent How did you go about quantifying these factors? Can you use Brown and Gibson method for this location decision? Explain.