4.4 Location decisions

WMH is a business which operates in the secondary sector. It makes furniture including tables and chairs. WMH’s employees are all members of a trade union. The Managing Director knows thebusiness is likely to remain small. She is considering introducing new technology into WMH’s factory. She also knows it is important for a manufacturing business to choose a suitable location for a factory.

(e) Explain two factors a manufacturing business should consider when deciding on a suitable location for a factory. Which factor is likely to be the most important? Justify your answer. [6]

GAE is a multinational company. It manufactures steel. GAE has 2400 employees and has factories in 4 countries. The business regularly introduces new technology. Holding inventory is important. GAE’s directors are planning to build a new factory and want to know how legal controls over location might affect this decision. The Managing Director said, ‘The new factory will create many external benefits.’

b) Identify two ways legal controls over location might affect a business. [2]
Way 1:

Way 2:

Suliman owns a small business which sells t-shirts on its website. He operates as a sole trader. Suliman is analysing data for his existing business. An extract from this data is shown in Table 4.1. Suliman wants to open his first shop and needs to decide on a suitable location. He is considering which type of sales promotion to use for the new shop.

d) Explain two factors Suliman should consider when deciding on a suitable location for the new shop. [6]