When you creating the query for a report you can specify (User provided value) in the query value. When the the report is running it will ask the user to enter a value into the field. So if the location is in the inventory you can specify that field as user input value. It's not exactly same as you want. Unfortunately the canned reports can not be customized.
Well this once worked most of last year before we went past SP2 on 8.7. Not sure if that has forced these new changes. I just want to be able to select the report as usual with the location of groups created in LDMS. I do not want the locations to suddnely look at containers in AD??? surely there is a reveresable way for this. something has been changed so ldms is reading from AD. i will log a call with LANDesk and see what comes of it.