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In: Operations Management

What factors should be taken into consideration while a retailer is considering a location decision to...

What factors should be taken into consideration while a retailer is considering a location decision to be located in a new city?

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Expert Solution

The factors he should take into consideration while considering a new location are-

1. Market available in the city:

It is important to analyze the purchasing power parity of the customer. They need to know the market trends and deliver the product according to customer needs in the retail shop.

2. Logistics:

Availability of warehousing, transportation and other means of logistics play an important factor in deciding the location of a new store.

3. Competition: The availability of competition in the prospective area can post a threat to our revenues. Hence, competition analysis is a must.

4. Fixed and variable costs vs Profits: The various costs associated with the new store like maintenance, electricity, travel, logistics, variable costs, perishability etc. are an important factor in deciding the location of the store.

5. Availability of suppliers: The available suppliers will help in easy logistics and Transportation of goods from one place to another. They will help easing the business process and supply chain value creation will be maintained to higher levels.

keosha answered 6 months ago
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