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Flashcards in Chapter 8 Deck (10)
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1

location costs

once in place difficult to reduce

2

location decisions

long term decisions
decisions made infrequently
decision greatly affects both fixed and variable costs

3

country decisions

1. political, government
2. cultural and economic issues
3. location of markets
4. labor talent
5. resources
6. exchange rates

4

region decisions

1. Labor availability and costs
2. costs and availability of utilities
3. environmental regulations
4. government incentives and fiscal policies
5. proximity to raw materials and customers
6. land/construction costs

5

site decisions:

1. site size and cost
2. transportation systems
3. zoning restrictions
4. environmental impact issues

6

labor productivity (formula)

labor cost per day/productivity (units per day) = cost per unit

7

costs

tangible: labor, taxes
intangible: education, public transportation

8

factor-rating method

the process of selecting a location based on relevant factors

9

factor rating method steps (6)

1. list of relevant factors called key success factors
2. assign weights
3. develop scale
4. score each location for each factor
5. multiple score by weights for each factor for each location
6. recommend the location with the highest point score

10

factor rating formula

factor rating = weight x score