Question

Hyundai Motors is considering three sites-A, B, and C-at which to locate a factory to build its new-model automobile, the Hyundai Sport cise. The goal is to locate at a minimum-cost site. Cost is measured in terms of transportation costs, availability of resources, and other factors. Using this information, determine the optimal location for Hyundai's new factory

Answer 1

When choosing a location for a new factory, businesses take into account factors such as transportation costs, availability of resources, labor costs, proximity to suppliers and customers, infrastructure quality, taxes, and government competence. Alfred Weber's Least Cost Location Model emphasizes transportation costs as a key factor for determining the optimal factory location. Land cost is also an important consideration, with cheaper and more plentiful land often found at the edges of cities.

Step-by-step explanation:

When deciding on the location for a new factory, businesses consider various factors such as transportation costs, availability of resources, labor costs, proximity to suppliers and customers, infrastructure quality, taxes, and government competence. Alfred Weber's Least Cost Location Model is a tool that focuses on transportation costs to determine the optimal location. In this model, the factory is situated closer to the input or output with the highest transport costs. Additionally, land cost is another major consideration, and factory owners often choose locations where land is more plentiful and affordable, typically at the edges of cities.