The first objective of a firm is to maximize its profits. The firm determines its factory’s location according to the profit maximizing principle. Although locating the firm’s factory at the place that minimizes the production costs contributes to increasing profits, the place is not necessarily the place of maximum profit. In order to find the factory’s location that maximizes firm’s profit, first, the firm needs to know some fundamental economic factors, the location of the market of the goods, the price of the goods, and the sales amount.