Comparative analysis of tangible and intangible factors in selecting the optimal location for a small-scale industry

MUSA, Adekunle Ibrahim (Department of Mechanical Engineering Olabisi Onabanjo University Ago Iwoye Ogun State Nigeria)
CHAUDHARY, Kapil (Department of Computer Science Engineering, Bipin Tripathi Kumaun Institute of Technology, Dwarahat, Uttrakhand, India)
POHETO, Daniel Jesuyon (Department of Mechanical Engineering, Faculty of Engineering, Olabisi Onabanjo University, PMB 2002, Ago Iwoye, Ogun State, Nigeria)

Journal Industrial Servicess
Vol 12, No 1 (2026): April 2026

Selecting an optimal location is critical for the sustainability and competitiveness of small-scale industries. This study evaluates three Nigerian states Lagos, Ogun, and Oyo using a multi-criteria decision-making (MCDM) approach. A Simple Additive Weighting (SAW) model was applied to assess both tangible factors and intangible factors. Data were collected from 30 purposively selected respondents and secondary sources. Results indicated that Oyo State ranks highest (7.85), followed by Lagos and Ogun (7.64 each). The study concludes that Oyo is the best option for cost-conscious investors, Lagos suits businesses prioritizing infrastructure, while Ogun is viable for low-cost operations with manageable security risks. The robustness of the results was confirmed by a sensitivity analysis (70:30 weighting). The paper is significant as it incorporates tangible-intangible trade-offs in the location choices of SMEs in the framework of a developing economy. The findings emphasize a holistic approach to location selection. Future studies should explore technology and sustainability in industrial location decisions.