Agglomeration or concentration of firms in a locale occurs when there is sufficient demand for support services for the company and labour force, including new investments in schools and hospitals. Also supporting companies, such as facilities that build and service machines and financial services, prefer closer contact with their customers. Degglommeration occurs when companies and services leave because of over concentration of industries or of the wrong types of industries, or shortages of labour, capital, affordable land, etc. Weber also examined factors leading to the diversification of an industry in the horizontal relations between processes within the plant. The issue of industry location is increasingly relevant to today's global markets and trans- corporations. Focusing only on the mechanics of the Weberian model could justify greater transport distances for cheap labour and unexploited raw materials. When resources are exhausted or workers revolt, industries move to different countries. x1 national ON MODELS Various models are available which help to identify the ideal location. Some of the popular models are: 1. Factor rating method 2. Weighted factor rating method 3. Load-distance method 4. Centre of gravity method 5. Break even analysis 2.5.1 Factor Rating Method The process of selecting a new facility location involves a series of following steps: 1. Identify the important location factors. 2. Rate each factor according to its relative importance, Le., higher the ratings is indicative of prominent factor. 3. Assign each location according to the merits of the location for each factor 4. Calculate the rating for each location by multiplying factor assigned to each location with basic factors considered. 5. Find the sum of product calculated for each factor and select best location having highest total score. ILLUSTRATION 1: Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, factor rating and scores for two potential sites are shown in the following table. Which is the best location based on factor rating method? PLANT LOCATION AND LAYOUT 35 Sl. No. Location factor Factor rating Rating Location 1 Location 2 8 1. 2. S 3 Facility utilization Total patient per month Average time per emergency trip Land and construction costs Employee preferences 6 3 4 S S