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5.4 LOCATION (WAYS OF RECOGNIZING PRODUCTION - nationally &…
5.4 LOCATION
OPTIMAL LOCATION
A business location that gives the best combination of quantitative and qualitative factors
3 key characteristics
Difficult to reverse if an error or judgement is made
Taken at the highest management levels
Strategic in nature
QUANTITATIVE FACTORS
Transport costs
Market potential
Labour costs
Site and other capital costs
Government grants
Techniques that can be used to assist in the location decision
Investment appraisal
Break-even analysis
Profit estimates
QUALITATIVE FACTORS
Labour supply
Environmental concerns
Managers' preferences
Ethical considerations
Room for further expansion
Infrastructure
Safety
Other locational issues
Planning restrictions
External economies of scale
The pull of the market
Multi-size locations
WAYS OF RECOGNIZING PRODUCTION - nationally & internationally outsourcing
Freed-up internal resources
Loss of job within the business
Access to quality service or resources
Quality issues
Improved company focus
Customer resistance
Increased flexibility
Security
Reduction & control of operating costs
Outsourcing evaluation
Offshoring
POTENTIAL LIMITATIONS
Level of service concerns
Supply-chain concerns
Cultural differences
Ethical considerations
Language & other communication barriers