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Factor-Rating

Factor-rating systems are among the most commonly used techniques for choosing a location, because they analyze diverse factors in an easily comprehensible manner. Factor-rating systems simply consist of a weighted list of the factors a company considers the most important and a range of values for each factor.

A company can rate each site with a value from the range based on the costs and benefits offered by the alternative locations, and multiply this value by the appropriate weight. These numbers are then summed to get an overall “factor rating.”

Then a company can compare the overall ratings of alternative sites. This technique enables a company to choose a location systematically based on the best rating 

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