Location decisions
Cambridge IGCSE Business Studies (0450) · Unit 4: Operations management · 9 flashcards
Location decisions is topic 4.4 in the Cambridge IGCSE Business Studies (0450) syllabus , positioned in Unit 4 — Operations management , alongside Production of goods and services, Costs, scale of production and break-even analysis and Quality management. In one line: 'Proximity to market' refers to the closeness of a business to its customers. It's crucial because it can reduce transportation costs, improve customer service by ensuring faster delivery, and allow for quick feedback on products.
This topic is examined in Paper 1 (short-answer questions, built around a pre-released case study) and Paper 2 (extended case-study analysis).
The deck below contains 9 flashcards — 4 definitions, 4 key concepts and 1 application card — covering the precise wording mark schemes reward. Use the 4 definition cards to lock down command-word answers (define, state), then move on to the concept and application cards to handle explain, describe and compare questions.
'proximity to market' and explain why it's a crucial location factor
'Proximity to market' refers to the closeness of a business to its customers. It's crucial because it can reduce transportation costs, improve customer service by ensuring faster delivery, and allow for quick feedback on products.
Questions this Location decisions deck will help you answer
- › Explain why a manufacturing business might choose a location with 'proximity to raw materials'. Provide an example.
- › Why is 'labour supply' an important factor when choosing a business location?
- › Assess the impact of good 'transport links' on a business's success.
- › What are the potential drawbacks of 'relocation' for a business?
- › Explain how 'proximity to competitors' can be a location factor.
Define 'proximity to market' and explain why it's a crucial location factor.
'Proximity to market' refers to the closeness of a business to its customers. It's crucial because it can reduce transportation costs, improve customer service by ensuring faster delivery, and allow for quick feedback on products.
Explain why a manufacturing business might choose a location with 'proximity to raw materials'. Provide an example.
Proximity to raw materials reduces transportation costs and ensures a steady supply of inputs, especially if the raw materials are bulky or perishable.
Why is 'labour supply' an important factor when choosing a business location?
An adequate 'labour supply' ensures a business has enough skilled and unskilled workers available at reasonable wages. A sufficient labor pool minimizes recruitment difficulties and potential production delays.
Assess the impact of good 'transport links' on a business's success.
Good 'transport links' such as roads, railways, and ports facilitate the efficient movement of goods and people, reducing transportation costs and improving access to markets and supplies. Poor transport links can lead to delays and increased expenses.
Describe two types of 'government incentives' and how they can influence location decisions.
'Government incentives' such as tax breaks and grants can significantly reduce the cost of setting up or operating a business in a particular location. These incentives can make otherwise unattractive locations more appealing.
Explain the term 'infrastructure' and provide examples of how it affects location decisions.
'Infrastructure' refers to the basic physical and organizational structures needed for a business to operate, such as roads, utilities (water, electricity), and communication networks. Good infrastructure reduces costs and improves efficiency.
What are the potential drawbacks of 'relocation' for a business?
'Relocation' can disrupt operations, lead to the loss of key employees who are unwilling to move, and involve significant costs associated with setting up a new facility and potentially selling the old one.
Define 'globalisation' and explain how it influences location decisions.
'Globalisation' is the increasing interconnectedness of countries through trade, investment, and cultural exchange. Globalisation provides businesses with access to wider markets, cheaper labor, and new resources, impacting location decisions.
Explain how 'proximity to competitors' can be a location factor.
Locating near competitors can be beneficial. It allows businesses to benefit from established customer flows and shared infrastructure, such as parking. It also increases competition.
Key Questions: Location decisions
Define 'proximity to market' and explain why it's a crucial location factor.
'Proximity to market' refers to the closeness of a business to its customers. It's crucial because it can reduce transportation costs, improve customer service by ensuring faster delivery, and allow for quick feedback on products.
Describe two types of 'government incentives' and how they can influence location decisions.
'Government incentives' such as tax breaks and grants can significantly reduce the cost of setting up or operating a business in a particular location. These incentives can make otherwise unattractive locations more appealing.
Explain the term 'infrastructure' and provide examples of how it affects location decisions.
'Infrastructure' refers to the basic physical and organizational structures needed for a business to operate, such as roads, utilities (water, electricity), and communication networks. Good infrastructure reduces costs and improves efficiency.
Define 'globalisation' and explain how it influences location decisions.
'Globalisation' is the increasing interconnectedness of countries through trade, investment, and cultural exchange. Globalisation provides businesses with access to wider markets, cheaper labor, and new resources, impacting location decisions.
More topics in Unit 4 — Operations management
Location decisions sits alongside these Business Studies decks in the same syllabus unit. Each uses the same spaced-repetition system, so progress in one informs the next.
Cambridge syllabus keywords to use in your answers
These are the official Cambridge 0450 terms tagged to this section. Mark schemes credit responses that use the exact term — weave them into your answers verbatim rather than paraphrasing.
Key terms covered in this Location decisions deck
Every term below is defined in the flashcards above. Use the list as a quick recall test before your exam — if you can't define one of these in your own words, flip back to that card.
How to study this Location decisions deck
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