Summary
Location may determine up to 50% of operating expense. Location is also a critical element in determining revenue for the service, retail, or professional firm. Industrial firms need to consider both tangible and intangible costs. Industrial location problems are typically addressed via a factor-rating method, locational cost–volume analysis, the center-of-gravity method, and the transportation method of linear programming.
For service, retail, and professional organizations, analysis is typically made of a variety of variables including purchasing power of a drawing area, competition, advertising and promotion, physical qualities of the location, and operating policies of the organization.
Key Terms
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