Maximisation of profit which also implies cost minimisation is the most important goal in their choice of particular place for the location of industries. Some factors influencing the same are :
(i) Proximity to markets : Areas or regions having high purchasing power provide large market therefore luxury items producing industries are located in these regions.
(ii) Availability of raw material : Raw material used by industries should be cheap and easy to transport. Industries based on cheap, bulky and weight losing material (ores) are located close to the sources of raw material. Such as steel, sugar, and cement industries.
(iii) Availability of labour : Some types of manufacturing requires skilled labour therefore IT industries are located near urban-educational centres where skilled labours are easily available.
(iv) Access to sources of energy : Industries which use more power are located near energy supplying sources such as the aluminium industry.
(v) Transportation and communication facilities: Speedy and efficient transport facilities reduces the cos of transport. Therefore, industries are attracted to regions which have good transport facilities.
(vi) Government policy: Governments adopt 'regional policies' to promote 'balanced' economic development and hence set up industries in backward and tribal areas.