Location decision is very important in retailing business because location involves large costs. Customer traffic is also affected by the selection of location; which consequently affects the volume of business. Thus, retailers should understand the importance of location decisions in the context of retail business.
Following are the desired standards:
1. Location of the stores should be carefully decided and planned so as to ensure maximum efficiency.
2. The best location of stores is one that minimizes total handling costs and other cost related to stores operation and at the same time provides the needed protection for stored items and materials.
3. Stores location depends upon the nature and value of the items to be stored and the frequency with which the items are received and issued.
4. In general stores are located close to the points of use. Raw materials are stored near the first operation in process, materials close to the next operation, finished goods near the shipping area and tools and supplies in a location central to the personnel and equipment served.
5. All departments should have easy access to the stores and especially those which require heavy and bulky materials should have stores located nearby.
6. In big industries, having many departments stores, department possibly cannot be situated where it is convenient to deliver materials to all departments and at the same time near the receiving department: thus it is convenient to deliver materials to all departments and at the same time be near the receiving department thus it becomes often necessary to set up sub stores conveniently situated to serve different departments.
7. In decentralized stores systems each section of the industry has separate stores attached with it, whereas in centralized stores system the main store located centrally fulfils the needs for each and every department.