5.4 Flashcards
(14 cards)
What is location of production?
the physical space in which a company chooses to carry out its operations
What are the reasons that a business takes into consideration when choosing a location?
sociocultural factors
technological factors
economic factors
environmental factors
political factors
How do sociocultural factors impact location of production?
businesses need to be aware of the current and changing sociocultural context so that they can ensure their location gives them access to the target market for their product
How do technological factors impact location of production?
technological changes related to remote working and e-commerce have had a huge impact on the location decisions of businesses
How do economic factors impact location of production?
The costs of land and facilities are factors for businesses’ decisions about location. The more people that converge on a location, the greater change of attracting customers
How do environmental factors impact location of production?
business could choose a location to enhance their environemental impact, locating in an area where it can be envolved in regenerating ecological systems, making positive contributions to the environment
What are the four methods of regorganising production?
outsourcing
insourcing
offshoring
reshoring
What is outsourcing (subcontracting)?
a business hiring an external company to carry out a task that it could do itself
What are the benefits and limitations of outsourcing?
benefits include arranging production is clearer this way, and if there is a downturn in demand, the company can simply end the contract
limitations include the use of subcontractors results in a loss of control
What is offshoring?
the relocation of a business function to another country
What are benefits and limitations of offshoring?
benefits include companies can lower costs and increase productivity
limitations include communication and transportation will be made more difficult.
What is insourcing?
ending contracts with external suppliers to have its own personnel perform tasks
What is reshoring?
bringing back production to a country from a location aborad.
What are the advantages and disadvantages of reshoring?
advantages include more control over production and operations, and reduced risk
disadvantages include higher costs of production and could meet resistance with workers
