When Would a Business Choose to Locate near the Source

question 52

Multiple Choice

When would a business choose to locate near the source of the raw material?

• A)The company requires an important raw material that is difficult to transport.
• B)The company requires an important raw material that is expensive to transport.
• C)The company keeps its inventory of an important raw material low to keep costs down and counts on quick deliveries from suppliers.
• D)All of the above

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Definitions:

Anticipation Inventories

Stock held in anticipation of future demand or usage, allowing companies to meet customer orders without delay, often influenced by seasonal or forecasted demand increases.

Distribution Pipelines

Infrastructure used for transporting goods, utilities, or services from one point to another, often within a supply chain network.

Decoupling Inventory

Inventory kept in reserve to protect the production process from fluctuations in demand or supply, ensuring that operations can continue smoothly despite variability.

Consumption of Services

The process of using services provided by businesses or individuals, which can include anything from healthcare to recreational activities.