move oracle password file

How does the Oracle rdbms know where to find the password file?  I understand it is supposed to be located in the ORACLE_HOME/dbs directory, but what if you wanted it to be somewhere else?  Is the path that Oracle uses to find this file hard coded somewhere or is there some system parameter that one can use to tell it of a non-default location?  In the oracle documentation it states, " After you have created the password file, you can relocate it as you choose. After relocating the password file, you must reset the appropriate environment variables to the new pathname. If your operating system uses a predefined pathname, you cannot change the password file location.