A cost includes utilities labour and any other costs

This preview shows page 4 - 6 out of 7 pages.

A Cost includes utilities, labour, and any other costs that the accounting department is able to identify. There are two type of cost, tangible and intangible cost (Heizer, Render, & Munson., 2016). The advantage of cost is, it is able to measure in dollars that benefits the organization with the use of the information system. As for the disadvantage, an intangible cost is unable to estimate, and may not be known (Ramos, J., 2012) Proximity to markets Locating near the customers in an important factor to include. Especially stores like drugstores, restaurants, post offices, or barbers, demographics and proximity to market are the main location factors. The advantage is, convenient (Heizer, Render, & Munson., 2016). The disadvantage is, transporting finished goods may become expensive or difficult due to the product being bulky, heavy, or fragile. It might take a longer time during the transportation phase (Heizer, Render, & Munson., 2016). Proximity to suppliers The advantage of having their supplier near so that they can save on expensive inbound transportation costs. Especially heavy or bulky raw materials such as steel. Also products like perishable raw materials, are often locate close to suppliers so that the products will be not spoiled during long transportation period (Heizer, Render, & Munson., 2016). Proximity to competitors The competing companies will locate their store near to each other, as critical mass of information, gifted, support, or natural resources (Heizer, Render, & Munson., 2016). The advantage of proximity to competitors is it will force the company to provide a better quality products, service and pride in their work so that they will not be taken down by other people (Gartenstein, D., 2018). As for the disadvantage, this will result in decreasing the company’s market share and customer base. A competitive market can also lead the company to drive
LOCATION DECISIONS (PLG1) down their costs to remain aggressive. The company may be tied down to too much capital and not enough cash on hand (Gartenstein, D., 2018).

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture