4.5 Business Location

Question 1

Define ‘transport infrastructure’

Answer 1

The provision of roads, railways, ports and airports in an area for transporting people and goods.

Question 2

What is meant by ‘proximity?’

Answer 2

Nearness to.

It can relate to nearness to market, to raw materials and to labour supplies.

Question 3

Define ‘labour’

Answer 3

The people employed by a business to produce goods and services.

Question 4

Define ‘raw materials’

Answer 4

Materials used and processed in some way as part of the manufacture of a product.

Question 5

State the main factors influencing the choice of business location.

Answer 5

Costs
Proximity to market
Proximity the labour
Proximity to raw materials
Transport infrastructure

Question 6

Do all businesses need to locate close to their customers?

Answer 6

No - a business may sell online and deliver or goods goods could be downloaded digitally.

Question 7

What are the main cost considerations when choosing where to locate?

Answer 7

The costs of the site (land or premises).
Costs of labour (labour may cost more in prosperous areas).
Costs of transporting finished goods and raw materials.
Availability of government grants.

Question 8

Give an example of a business that would need to locate close to the market (customers).

Answer 8

Restaurants
Hairdressers
Retailers
Dentists

Question 9

Why is proximity to raw materials important?

Answer 9

Some materials are bulky and would cost a lot to transport.
Some materials are more readily available in certain areas.
Environmental considerations.

Question 10

How does supply of labour affect businesses?

Answer 10

The bigger the supply, the lower the labour cost/wages might be (link to unemployment levels).
Some businesses need certain skills which may be more plentiful in certain areas.
Some businesses may offer low skilled work and can train staff.