Business Location Factors: A Comprehensive Analysis
The location of a business is a critical decision, whether at its inception or when its current location proves unsatisfactory. As a business’s objectives and the surrounding environment evolve, the need for a new location may arise periodically.
Numerous factors influence business location, varying across different sectors. Let’s examine these factors in detail:
Factors Affecting Manufacturing Business Location
Production Methods and Location Decisions
- Small Scale: Transport and supplier location are
Inflation and Deflation: Impacts and Effects
Inflation
Inflation is the rate of increase in prices for goods and services.
It influences the interest rate we get on our savings and the rate we pay on our mortgages. Inflation also affects pensions, benefits, and the price of some train tickets.
Effects of Inflation
- Redistribution Effect:
- Affects recipients of fixed income (nominal incomes remain the same, but the real value drops).
- Affects the purchasing power of wages that don’t follow the rise of prices.
- Diminishes the value of loans and savings.
Cash Flow Management and Financial Ratios
Cash Flow Management: Shortfalls and Surpluses
When There is a Shortfall:
- Negotiate with suppliers to delay payments.
- Accelerate the recovery of receivables.
- Conduct special promotional spot sales.
- Solicit bank loans or credit.
- Sell fixed assets that are not essential for the development of activities.
When There is a Surplus:
- Prepay bank debt to save on interest.
- Take advantage of treasury cash to buy, obtaining better prices and discounts.
- Delay customer charges to increase sales and future profits.
- Make
Understanding Trade Policy: Tariffs, Effects, and Implications
Understanding Trade Policy: Tariffs and Their Effects
While free trade generally benefits all participating countries, trade policies are often used to influence trade relations. Common trade policy instruments include tariffs, fees, regulations, technical or administrative procedures, and controls.
What are Tariffs?
A tariff is a tax or levy imposed on goods crossing a national border. The most common type is the import tariff, while export tariffs are less frequent.
- Ad Valorem Tariff: A tax specified
Demand, Supply, and Cost Concepts in Economics
Demand and Its Determinants
1. Shortage in the future = increased consumption.
2. Veblen effect: Status symbols (e.g., diamonds) = high price = high consumption & vice versa.
3. Ignorance = more consumed even if prices are high.
4. Perceptions about quality = better quality = higher price.
5. Necessary items: Irrespective of price rise = consumption remains the same (e.g., life-saving medicines).
6. Inferior goods: (Public perceptions of goods – assume it is inferior) – when prices of such goods
Read MoreEstimating Construction Resource Requirements and Costs
Physical Resource Requirements
Question 1: Identifying Resources for a Timber Roof Frame
List and describe the physical resources (direct labor, subcontractors, and plant) you would select for constructing a timber-framed, two-story house roof frame.
Physical resources include:
- Material: From the Bill of Quantities
- Waste: Based on published rates of experience
- Direct Labor: From published output rates (labor hours per unit), net unit rates, and Safe Work Method Statements
- On-costs: The costs of employment,