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Questions and Answers
A manufacturing company is considering relocating its production facility. Which infrastructural element would be most critical for ensuring efficient supply chain management?
A manufacturing company is considering relocating its production facility. Which infrastructural element would be most critical for ensuring efficient supply chain management?
- Proximity to universities for recruiting skilled labor
- Access to recreational facilities for employees
- Robust road, rail, and port systems (correct)
- Availability of affordable housing for workers
A company wants to establish a manufacturing plant to export goods. Which factor related to the infrastructure of different countries should be assessed to ensure efficient operations?
A company wants to establish a manufacturing plant to export goods. Which factor related to the infrastructure of different countries should be assessed to ensure efficient operations?
- The availability of high-end restaurants
- The number of five-star hotels available for visiting executives
- The prevalence of social media use among the population
- The reliability of the power system (correct)
Why did companies such as Honda, Nissan and Toyota decide to have manufacturing plants in the UK before Brexit?
Why did companies such as Honda, Nissan and Toyota decide to have manufacturing plants in the UK before Brexit?
- To benefit from the UK's advanced technological infrastructure
- To circumvent trade regulations imposed by the UK government
- To gain access to the EU market (correct)
- To take advantage of lower labor costs compared to other European countries
A country's membership in a trade bloc most directly affects a business by:
A country's membership in a trade bloc most directly affects a business by:
A business is evaluating two countries for locating a new manufacturing plant. Country A has lower labor costs but an unreliable power grid. Country B has higher labor costs but a very reliable power grid. How should the business approach this decision?
A business is evaluating two countries for locating a new manufacturing plant. Country A has lower labor costs but an unreliable power grid. Country B has higher labor costs but a very reliable power grid. How should the business approach this decision?
Flashcards
Infrastructure
Infrastructure
Basic systems (e.g., transport, power) a country needs to function.
Transport Infrastructure
Transport Infrastructure
Evaluating roads, railways, ports, and airports for efficient export/import.
Buildings and Premises
Buildings and Premises
Assessing if a country offers suitable factories and workspaces.
Reliable Power Systems
Reliable Power Systems
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Trade Bloc
Trade Bloc
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Study Notes
- Infrastructure refers to the basic physical and organizational structures and facilities required for a society or business to operate.
Infrastructure in Country Location Decisions
- A key factor in deciding where to locate production is the infrastructure of the host country.
- Businesses need to assess if the country has adequate road, rail, sea, and air transport systems to ensure goods can be easily exported and imported.
- The availability of suitable buildings and premises for manufacturing is also essential.
- The reliability of the power system is crucial, with examples of frequent power cuts, such as in Ethiopia, potentially disrupting operations.
Infrastructure Rankings Research
- Global trade logistics rankings can be utilized to compare infrastructure quality between countries, specifically focusing on the infrastructure column.
Location in a Trade Bloc Research
- Starting production in a country can be a strategic move to gain access to a trade bloc.
- For example, Honda, Nissan, and Toyota have manufacturing plants in the UK to access the lucrative European market.
- The EU is identified as the world's largest trading bloc, accounting for about 20% of global GDP and involving approximately 500 million people.
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Description
Infrastructure is a key factor for businesses deciding where to locate production. Adequate road, rail, sea, and air transport systems are essential for exporting and importing goods. The reliability of the power system is also crucial to avoid operational disruptions.
