CRITERIA FOR DETERMING WAREHOUSE LOCATIONS

There are many considerations and factors to determine the best location for warehouses.  Ultimately, the most optimal selection will be the site that offers the company the maximum rate of return.  Dependent upon the use of warehouse and it's relationship to the production facility, there are several important considerations:  1.  Locating a warehouse at the production facility.  2.  Locating a single distribution center away from the main production facility.  3.  Locating a warehousing system in more than one location.

 
The following are important criteria for the locating warehousing: 

•  The ability to effectively service the market area in relation  with distribution costs
• Satisfy the transportation requirements availabilities in relation to rail, roadway system, and  road vehicles accessibility
• Distribution costs per unit including transportation that are prevailing in the market area
• Competing companies if they have warehousing in the area or region
• Availability of utilities – water, electric, gas, sewage, and their respective costs
• Labor supply and labor costs in the location warehouse is located
• Industrial relations productivity with the local labor market
• Pricing arrangements with warehouse distributors or retail merchants
• The level of service that may be required to satisfy customer demand for the delivery of products or goods
• Evaluation of each individual company’s requirements and potential and existing constraints
• Taxes that me be levied on the goods including real estate taxes, excise taxes, or other governmental assessments
• Attitudes of the local governments and residents regarding the construction or location of warehousing
• Any type of restrictions that could be imposed on warehousing
• Potential for future expansion
• Land acquisition costs
• Construction and maintenance costs
• The possibility of a change in use of the warehouse facility at a later time, if the company wants to sale or lease the land or building