How are country differences, production technology and production factors all affect the choice of where to locate production activities?
When fixed costs are substantial, the minimum efficient scale of production is high,
and/or flexible manufacturing technologies are available, the arguments for concentrating
production at a few choice locations are strong.
Country factors that can affect location decisions include:
A firm should locate its various manufacturing activities where the economic, political, and cultural conditions, including relative factor costs, are conducive to the performance of those activities.
Also; The type of technology a firm uses in its manufacturing can affect location decisions.
Three characteristics of manufacturing technology that are of interest may include:
Also; Two product factors impact location decisions:
Lastly, there are two basic strategies for locating manufacturing facilities: