Catalin Gheorghe – Department of Engineering and Industrial Management, Transylvania University of Brasov, 29 Eroilor
Street, 500036, Brasov, Romania
DOI: https://doi.org/10.31410/ERAZ.2019.169
5th International Conference – ERAZ 2019 – KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, Budapest – Hungary, May 23, 2019, CONFERENCE PROCEEDINGS
Published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia
Conference partners: Faculty of Economics and Business, Mediterranean University, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia;
ISBN 978-86-80194-20-2, ISSN 2683-5568, DOI: https://doi.org/10.31410/ERAZ.2019
Abstract
The relocation of production by which a company partially transfers its production facilities,
from one country to another, or from one city to another is a topical issue for industrial affairs. Also known
as „offshoring” or „delocalization”, it is one of the concrete and visible aspects of the globalization of the
economy. Encouraging businesses, especially producers, to move between states, or between areas of a
state, remains a popular policy of local or national economic development. Moving the company is a project
that involves a great deal of responsibility, because of the many details that need to be solved.
Typically, the decision to move facilities to certain locations or geographical areas is determined by
a number of fundamental factors such as: production costs, complexity of markets, access to labor,
finance and lending. Frequently it is considered that relocation is not just the answer to a single risk
factor (climate, pollution), but a complex of decisions initiated and based on a number of social, economic,
environmental and policy factors. In line with research on this topic, the strongest influence on
the relocation of an enterprise is its expansion and the need to increase profits.
Theories on the relocation of industrial companies are a special case of the theory of location, which
is focused on the geographic location of economic activity and the importance of location to support
growth of the company. Another important reason for the decision to relocate is cost reduction, due to
wage differences, economies of scale, energy prices and other economic and financial factors.
Even if it is a long-term decision, sustained by considerable financial support, the criteria of physical,
economic, social or political nature with more or less predictable behavior, put managers in the position
of always being careful, about the consequences of the emplacement on costs, to take account of
a number of unidentified or incorrectly quantified situations and risks, requiring a reconsideration of
the geographical situation of the undertaking. The article aims at identifying, grouping and eliminating
overlaps, between the criteria considered in the literature at emplacement selection, in case of relocation
of production. Optimizing the site selection decision means finding solutions or sets of solutions
optimal relocation of production.
The solution to the optimization problem is the answer to the question: what is the optimal location
option, so that all identified criteria are respected in different proportions? To substantiate the decision
to relocate production, the problem of choosing the optimal site was approached as a multi-attribute
type, for which those methods were selected and applied, that led to reliable results but at the same time
constituting easy tools to be applied by an interested company.
Key words
relocation, criteria, decision, model, industrial business.
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