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What does the location of a production facility affect?
AOnly the wages that the production workers are paid
BOnly the taxes the firm pays on its annual profit
COperating and shipping costs, price, and competitiveness
DOnly the number of products the firm chooses to make
Answer & Solution
Correct answer: C. Operating and shipping costs, price, and competitiveness
1. Where a facility sits determines what it costs to run and what it costs to ship from.
2. Those costs feed through into the price of the product or service.
3. Price in turn shapes the company's ability to compete.
4. So location reaches far beyond wages or taxes alone, which is why options A, B, and D are each too narrow.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section 10.3 Location, Location, Location: Where Do We Make It?_
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