Location directives are the rules that govern what location to pick from and put to. Location directives can be setup very specifically for different items, different location types/profiles, warehouses, quantities, units of measure, etc. Very careful consideration is needed when setting up location directives for an advanced warehouse.
See below for an article that discusses location directives in more detail: https://technet.microsoft.com/en-us/library/dn553215.aspx
daxwhse 