Solution:

Relative Advantages and Disadvantages of Urban Location:

• Advantages:

  • (i) An urban location is well-connected with different modes of transport.

  • (ii) If offers excellent facilities for communication.

  • (iii) Power and water supplies are easily available.

  • (iv) Facilities for repairs and maintenance are better.

  • (v) The adequate supply of unskilled and skilled labour force is available.

  • (vi) The allied and subsidiary industries are present in plenty.

  • (vii) There are better living conditions for all levels of employees.

  • (viii) Large local market for the products manufactured is available.

  • (ix) The services of experts are easily available.

  • (x) Financing institutions such as banks, underwriting houses and special financial institutions are nearby.

• Disadvantages:

  • (i) Cost of land and construction of building on it is high.

  • (ii) Land suitable for a large-scale unit is difficult to get and is usually, limited in the area; if available.

  • (iii) Due to the high cost of living in an urban area, labour wages are also high.

  • (iv) Local taxes and rents tend to increase making the costs of operation higher.

  • (v) employee-employer relations are often tense.

  • (vi) Provision of housing accommodation for the staff proves very costly.

  • (vii) Expansion of the industry because of high costs is seldom possible.

  • (viii) There are many restrictions imposed by local municipalities regarding the disposal of effluent water, wastes etc.

Relative Advantages and Disadvantages of Rural Location or Sub-Urban Location:

• Advantages:

  • (i) Land cost is low and is available in plenty for construction of the building and also for expansion.

  • (ii) Labour costs are proportionately lower as compared to that of urban locations.

  • (iii) employee-employer relations are more friendly and there are no union problems.

  • (iv) Taxes are low.

  • (v) Several governmental incentives may be available; because it wants the balanced development in all areas.

  • (vi) There is the absence of undesirable municipal restrictions on the manufacturing units.

  • (vii) There is a lower cost of living for the employees.

• Disadvantages:

  • (i) There is a shortage of skilled labour and managerial personnel.

  • (ii) There is a lack of transport and communication facilities.

  • (iii) Power is often not available.

  • (iv) Rural areas are far away from markets.

  • (v) The medical, educational and amusement facilities are not available.

  • (vi) It is difficult to get ancillary services.

  • (vii) There are difficulties in the procurement of materials.