LOCATION
DECISIONS

Textbook, Chapter 20 [pg 241-256]

Name: ……………………………………………

Class: ……………………

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Learning outcomes:
• Identify factors affecting location decisions of manufacturing, service
and retailing businesses.
• Discuss factors that a business could consider when deciding which
country to locate operations in.
• Identify role of legal controls on location decisions.
• Recommend and justify an appropriate location for a business in
given circumstances.

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Factors affecting the location of a manufacturing business

1) Production m________ and location decisions.

• The i_____________ of nearness of components.
eg: Using job production method, the business most likely operate in
a s_______ scale, therefore the influence of the of nearness
components will be less importance compare to flow production.

2)  M__________.    
• The company able to sell the products faster to customers.

3)  R___________________.    
• The company able to save transportation cost. Supplier also able to
deliver the raw materials/ components to the factory on time.

4)  E___________________.    
• The company able to save transportation cost. Supplier also able to
deliver the raw materials/ components to the factory on time.

5) A________________.
• Labours and skilled workers must be available near the factory.

6) G__________________.
• If an area has high unemployment, the government may give money
to businesses to locate in that area.

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7) T__________________.
• Products are able to transport to the market faster if the factory is
located in a place accessible to a transport system.

8) P___________________.
• Availability of power and water supply is important for a factory to
ensure the production process can be carried out.

9) C________________.
• This will not influence most manufacturing businesses. For instance,
Silicon Valley in the US has a very dry climate which aids the
production of silicon chips.

Factors affecting the location of a service sector business

1) C_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

2) P_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

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3) T_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

4) A_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

5) C_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

6) N_______________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

7) R_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

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Factors affecting the location of a retailing business

1) S_______________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

2) N_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

3) C_________________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

4) A_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

5) R_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.
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6) A_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

7) S_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

8) L_____________________.
Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

Locating in different countries

1) New markets overseas.

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

2) Cheaper or new sources of materials

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.
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3) Difficulties with the labour force and wage costs.

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

4) Rents/ taxes consideration.

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

5) Availability of government grants and other incentives.

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

6) Trade and tariff barriers.

Explanation: ____________________________________________
______________________________________________________
______________________________________________________.

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The role of legal controls on location decisions

Governments try to influence firm location decision. This is to:

• encourage businesses to set up and expand in high unemployment
area.
• discourage firms from locating in overcrowded areas of places which
bring pollution to the nearby residents.

Methods used by the government to influence whre firms locate:

1) Planning regulations
2) Provide grants and subsidies to businesses to encourage them to
locate in underdeveloped parts of the country.

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