Chapter 20: Location Decisions

The ‘location decision’ for a business means:

• deciding where the departments of a business are located
• an owner deciding on the positions for products in the shop
• deciding where a business is going to operate from
• deciding where a business is going to market its products.

Business location decisions are very important for all of the following reasons except that:

• the location might affect the sales of a product
• the location might affect the costs of production
• the location might affect the available supply of labour
• the location might affect the legal form of ownership.

In which scenarios is location nearest to reliable suppliers likely to be most important?

• a manufacturing firm using Just-in-Time stock policies
• a bank with many personal and business customers
• a farmer raising sheep for meat production
• a specialist clothes designer who uses job production

If a product gains weight during production then location of the factory is likely to be:

• close to the sources of raw materials
• close to the major markets
• close to supplies of skilled labour
• close to manufacturers of machinery used in production

When a raw material loses weight during processing, location of the firm is likely to be:

• close to the sources of raw materials
• close to the major markets
• close to supplies of skilled labour
• close to manufacturers of processing machinery.

All of the following are likely to affect the location of a stationary wholesaler except:

• the availability of government grants in certain regions
• transport links from suppliers and to markets
• external economies of scale like nearness to a food supplier
• availability of unskilled workers.

Government location grants are most likely to be given in regions of the country having

• many similar businesses operating
• just experienced big firms closing down
• very high levels of employment
• many other firms starting up.

The location of which of the firms will be influenced by the availability of skilled workers?

• computer software design and production
• large supermarket
• mass producer of family car models
• travel company’s ticket office

If a business is located in the wrong area then it is likely to experience:

• low costs of production
• low inefficiency
• low break-even point
• low profits.

The location decision for a retailing business is most likely to be affected by:

• costs of producing the goods
• government grants to firms in the secondary sector
• location of competitors
• location of energy sources