Network Design Major Locational Determinants

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What are the major locational determinants?

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Labor climate, availability of transportation, proximity to markets and customers, quality of life, taxes and industrial development incentives, supplier networks, land costs and utilities, and company preference.

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How does labor affect location decisions?

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Labor-intensive industries emphasize favorable labor climate and rates. Unemployment rates can affect wage scales and attractiveness of a location.

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Why is transportation important in location decisions?

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High-quality transportation services are crucial for logistics, affecting access to highways, rail, airports, and ports. Transport capabilities vary by region.

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What is the significance of proximity to markets and customers?

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Proximity affects logistics and competitive advantage, considering transportation availability, freight cost, and market size.

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How does quality of life influence location decisions?

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Quality of life affects employee well-being and work quality, important for attracting a mobile professional workforce, especially in high-tech industries.

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What role do taxes and industrial development incentives play in location decisions?

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State and local taxes impact business costs. Personal taxes affect regional attractiveness. Knowledge of these taxes is crucial.

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How do supplier networks affect location decisions?

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For manufacturing, availability and cost of raw materials and transport are key. For distribution, geographic fit with suppliers is important.

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Why are land costs and utilities important in location decisions?

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Land costs and utility availability are critical for facilities like manufacturing plants. Consideration of building codes and construction costs is necessary.

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What is the importance of IT infrastructure in location decisions?

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IT infrastructure affects supply chain operations, including data transmission speed and quality, network enablement, and security.

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How do company preferences influence location decisions?

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Companies may prefer locations based on proximity to metropolitan areas, competitors, or shared benefits like skilled labor and marketing resources.