When all costs are considered, location may alter total Other costs that may be influenced by location include taxes, Total revenue may be needed just to cover freight expenses of the raw materials coming in andįinished products going out.
For instance,ĭepending on the product and type of production or service taking place, transportation costsĪlone can total as much as 25% of the product’s selling price. Location has a major impact on the overall risk and profit of the company. Strategic impact, cost, and international aspect of these decisions indicate how significantįirms throughout the world are using the concepts and techniques of this chapter toĪddress the location decision because location greatly affects both fixed and variable costs. In Moscow, it ended 3 years of advance preparation of a Russian food-supply chain. Plans to build its first major overseas plant in Vance, Alabama, it completed a year ofĬompetition among 170 sites in 30 states and two countries. Linking its Paris and Memphis package hubs to Asia. Opened its Asian hub in Guangzhou, China, it set the stage for “round-the-world” flights Indeed, one of the most important strategic decisions made by many companies, includingįedEx, Mercedes-Benz, and Hard Rock, is where to locate their operations. World markets continue to expand, and the global nature of business is accelerating. Understand the differences between service- and industrial-sector location analysis 351 Identify and explain seven major factors that affect location decisions 342Ĭomplete a locational cost–volume analysis graphically and mathematically 347
Is big enough to hold 33 football fields. FedEx’s fleet of 667 planes flies into 375 airports worldwide, thenĭelivers to the door with more than 80,000 vans and trucks.Īt the preliminary sorting area, packagesįacility covers 1 million square feet it Starting with oneĬentral location in Memphis, Tennessee (now called its superhub), the $45 billion firm has addedĪ European hub in Paris, an Asian hub in Guangzhou, China, a Latin American hub in Miami, andĪ Canadian hub in Toronto. Hub for small-package delivery, the idea has proven extremely successful. Even though Fred Smith, founder and CEO, got a C on his college paper proposing a Vernight-delivery powerhouse FedEx has believed in the hub concept for its 46-year existence. © 2023 Pittsburgh Steelers.Related Studylists IND3302 Preview text GLOBAL COMPANY PROFILE: FedEx
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