Studied by 6 people
Efficiency of production —> keep low cost (competitive advantage)
Quality —> must be suitable for the purpose intended
Flexibility and innovation —> develop and adapt new methods/processes
Design of the product or nature of the service
Higher price for better quality
Efficiency with the input management
Prove to consumers that you are reducing washer
Increase productivity (reduce cost per unit) —> Less price
Convive consumer to pay more for the old than the cost of input
Luxury brands
When a business wants to be a CSR —> they must do this
Planet people profit
Reducing waste, water, and energy use
Energy from renewable sources
Using recycled pricier/ ensuring materials can be recycled
Designing phase and healthy production system
Design workplace to allow social interactions
Creation jobs in low income area
Relocation
Reducing negative impact of production on communities
Efficient use of assets to maintain profitability
Managing operational assets —> extend lifespan
Increase efficiency of production process
Increase competitiveness by lowering prices
Maintain profitability
Research and product development t to create value and customer interest
Production system is more flexible with multi-skilled workers
Motivation might be high as group work builds team spirit
All workers in the cell have close proximity with the equipment required: low handling costs and time is saved
Output is not high as traditional flow production
Different cells may work at different speeds: potential tension between them and imbalance in number of units produced
Employee training: high costs
Investment in new machinery (each cell)
Size of the market
Small and exclusive —> Job production
Market for similar and consistent (Throughout the year) products —> Flow production
Market that requires a large number of units at different times —> batch production
Ex. School products
Amount of capital available
Flow production is very expensive.
Job and batch production are less
Availability of other resources
Large flow production requires many unskilled workers and a large flat area
Job production needs skilled workers
Company must adapt to suit current resources
Market demand exists for products adapted to specific customer requirements
Cost advantages
High break - even levels of production
Low profit or even losses
If operating at low-capacity utilisation, unit fixed costs will be high
Raises transport costs for both materials and finished products
Relatively inaccessible to customers
Profit estimation (Estimate revenue and costs in this location)
Investment appraisal (used to identify locations with the highest potential returns over a number of years.
Break even analysis (Lowest break even level of output level)
Safety
remote areas
:( may increase transportation costs
Room for further expansion
:( expensive to relocate if site is too small to accommodate an expanding business
Manager’s preferences
Not valid for PLC
Labor supply
availability of skilled or unskilled workers
Ethical consideration
Countries with weaker control over worker welfare
May create redundancies
Environmental concerns
if there are strong environmental pressure groups
Infrastructure
quality of local infrastructure, especially transportation and communication links
Pull of the market:
Their may be other factors (internet) that may decide which location is better
Planning restrictions:
Local authorities may want businesses because of employment. Others many want to protect environment of town or village
External economies of scale
places where there are cost reduction since companies around alr have economy of scale
Reverse of offshoring
Why?
Labour costs may rise
Quality control issues
Companies had to fill a whole shipping container to get the per unit cost down and has to put goods waiting in expensive warehouses
Working conditions under strict ethical codes
Note 
Flashcard (66)