What is the primary reason for a firm like Coca-Cola to have bottling plants in many cities?
Explanation
This question illustrates the 'proximity to markets' and 'proximity to suppliers' concepts. For products where the final product is much heavier or bulkier than the unique raw materials (like beverages), it is more economical to ship the concentrate and add the bulky ingredient (water) close to the final customer.
Other questions
What is the overall objective of a firm's location strategy?
For industrial location decisions, what is the usual strategic focus?
A plant in South Carolina pays its workers 70 dollars per day and produces 60 units daily. A plant in Juarez, Mexico, pays its workers 25 dollars per day and produces 20 units daily. What is the labor cost per unit for each plant?
What is the term for the tendency of competing companies to locate near each other, often because of a critical mass of information, talent, venture capital, or natural resources?
Which of the following is the first step in the factor-rating method for evaluating location decisions?
A company is using the factor-rating method to choose between two locations, France and Denmark. The 'Tax structure' factor has a weight of 0.39. France has a score of 75 and Denmark has a score of 70 for this factor. What are the weighted scores for France and Denmark for the 'Tax structure' factor?
What is the term for a location evaluation technique that involves identifying fixed and variable costs, and graphing them to find the lowest cost for a given production volume?
European Ignitions Manufacturing is considering three locations. Athens has fixed costs of 30,000 dollars and variable costs of 75 dollars per unit. Brussels has fixed costs of 60,000 dollars and variable costs of 45 dollars per unit. For what production volume is the total cost for Athens and Brussels the same?
What does the center-of-gravity method seek to find?
Quain's Discount Department Stores has four locations: Chicago (x=30, y=120, Q=2000), Pittsburgh (x=90, y=110, Q=1000), New York (x=130, y=130, Q=1000), and Atlanta (x=60, y=40, Q=2000). What is the x-coordinate for the center of gravity?
What is the primary difference in focus between location analysis in the industrial sector versus the service sector?
According to Table 8.6, which of the following is listed as a technique primarily used for goods-producing location analysis but not for service/retail?
What is a Geographic Information System (GIS)?
Which of the following reasons is cited for firms locating near their suppliers?
What are tangible costs in the context of location decisions?
According to the World Economic Forum rankings in Table 8.1, which country was ranked number 1 for competitiveness?
What is operational hedging in the context of location strategy?
In the locational cost-volume analysis for European Ignitions, Brussels has total costs of 150,000 dollars at a volume of 2,000 units, and the selling price is 120 dollars per unit. What is the expected profit at this location and volume?
Why do service organizations like drugstores, restaurants, and post offices often find proximity to market to be the primary location factor?
What is the key assumption of the center-of-gravity method regarding cost?
What is a major reason companies make location decisions infrequently?
Which of the following is NOT one of the eight major determinants of volume and revenue for a service firm?
If a worker in Myanmar makes 3 dollars per day and produces 40 units, and a worker in Billings, Montana makes 60 dollars per day and produces 100 units, what are their respective labor costs per unit?
In the factor-rating example for a theme park, the 'Labor availability and attitude' factor is given a weight of 0.25, and the score for Denmark is 60. What is the weighted score for Denmark for this factor?