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@BharatKumarKobagana, your steps are perfect but, it fails in few systems saying "No such File or Directory" during physical volume creation. For that we found a solution where we have to format the file device and then need to be assigned back to loopback device.

STEPS:

  1. Create a 8G loopback device using: dd if=/dev/zero of=NewDrive.img bs=1G count=8

    #Additional Step

  2. Device file format for some ext3 or other: mkfs.ext3 NewDrive.img

  3. Create loop back device: losetup /dev/loop0 NewDrive.img

  4. Then create physical volume on it: pvcreate /dev/loop0

  5. Now you can create volume group: vgcreate "cinder-volumes" /dev/loop0

@BharatKumarKobagana, your steps are perfect but, it fails in few systems saying "No such File or Directory" during physical volume creation. For that we found a solution where we have to format the file device and then need to be assigned back to loopback device.

STEPS:

  1. Create a 8G loopback device using: dd if=/dev/zero of=NewDrive.img bs=1G count=8

    #Additional Step

  2. Device file format for some ext3 or other: mkfs.ext3 NewDrive.img

  3. Create loop back device: losetup /dev/loop0 NewDrive.img

  4. Then create physical volume on it: pvcreate /dev/loop0

  5. Now you can create volume group: vgcreate "cinder-volumes" /dev/loop0