Question

One of the objectives of facility location analysis is to select a site with the lowest cost. Is suppliers one of the hidden costs?

Answer 1

Answer: No it is not.

Step-by-step explanation:

The 2 main hidden costs to watch out for when selecting a site are;

• Movement of Pre-production Material between locations.

If the site is located such that the movement of goods to be manufactured from one site to the other would be quite expensive, this is a hidden cost that should be included in the analysis.

• Becoming less responsive to the customer.

This can happen if the site is located too far from where the Customers are primarily based. Should this happen, the distance will make responding to the customer harder and responsiveness will invariably become less.