Why may a cheap location not be the best location, and why is it costly for...

Why may a cheap location not be the best location, and why is it costly for a small firm to choose a location that is too small?

Solutions

Expert Solution

For the first question I would like to suggest that even if the location is cheaply available it doesnt mean that it wont affect other monetary factors. For example, it can be locationally connstraint for any raw material receival or finished goods delivery, we might incurr issues with availability of labour and raw material due to location constraints, althought it is cheaply avaialble. So choosing for cheap location is not always the best option.

On the otherhand it is really costly for a firm to choose a location that is too small, because some operating and admin costs are fixed eventhough how small or how big the location may be. At the same time, it will turns out to be highly costly if the company goes for expansion in future, which needed an additional location for the increasing demand. So it is always better to plan a location which is optimal in size keeping in view of the futuristic scenerio.

keosha answered 9 months ago

Next > < Previous

Related Solutions

Which of the following best states why why in the short run a firm may decide...

Which of the following best states why why in the short run a firm may decide to continue to produce, even with economic losses? Select one: a. Price is greater than average variable cost but less tha average total cost . b. Total revenue is greater than total variable cost but less than total cost. c. All of the above are reasons for continuing production. d. One of the above is incorrect. e. Economic losses areless than fixed cost.

Why is it not enough to understand profits as the result of buying things cheap and...

Why is it not enough to understand profits as the result of buying things cheap and selling them dear? Because you cannot always succeed in doing that All of the above Because that kind of activity can never give us net profits across the economy Because you can always ,make more profits by buying more cheap goods

Explain some of the costs of hyperinflation, If they are so costly to an economy why...

Explain some of the costs of hyperinflation, If they are so costly to an economy why do they occur?

Company- NIKE Location- GERMANY For this location conduct an external environmental assessment. What may be some...

Company- NIKE Location- GERMANY For this location conduct an external environmental assessment. What may be some of the entry barriers? How competitive is the market? How does the current political, economic, institutional, and regulatory scenarios effect business? What are some of the cultural factors to be considered?

Question 1: Which of the following description best explains why the median may be a better...

Question 1: Which of the following description best explains why the median may be a better measure to describe the number of hours slept than the mode or mean? Question 2: Which measure of central tendency (the mean, median or the mode) best describes the pattern of data for Saturday night? What about for Tuesday night? Explain and defend your answer. Make sure you take a look at the data before you answer this question, and think about whether there...

1. What is a stock option? Why are stock options costly for companies? 2. Why did...

1. What is a stock option? Why are stock options costly for companies? 2. Why did CEO pay increased dramatically in the 1990s? 3. What do you think about the Standard Setting Process of the Accounting Rules 100 words each question

where is the best location for a software production company, Animation firm and Snow board Manufacturers....

where is the best location for a software production company, Animation firm and Snow board Manufacturers. Explain why?

Why is U.S. health care so costly? Why have almost all past cost controls failed? What...

Why is U.S. health care so costly? Why have almost all past cost controls failed? What are the best ways to contain health care costs, and how can we do so without harming access or quality?

why is us health care so costly? why have almost all past cost controls faild? what...

why is us health care so costly? why have almost all past cost controls faild? what are the best ways to contai. health care costs, and how can we do so without harming access or quality?

On May 22, 2018, for the purpose of transporting company officials to remote location, Oil &...

On May 22, 2018, for the purpose of transporting company officials to remote location, Oil & Gas Ltd. purchased a small airplane costing $120,000 and paid $20,000 for painting and lettering. The company paid $25,000 in cash and signed a one-year notes payable for the balance. The airplane is expected to have a useful life of 16 years or 1,500,000 kilometers, with a salvage value of $20,000. Required Calculate the cost of the airplane and prepare a journal entry Compute...

Subjects