Do you think access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory? Justify your answer.
CAMBRIDGE
O level and GCSE
Year Examined
May/June 2022
Topic
Business Location
👑Complete Model Essay
Do you think access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory?
When a manufacturing business is deciding where to locate a new factory, there are many factors to consider. Access to labour is one important factor, but transport links, proximity to the market, access to raw materials, government influence and the availability of land are also important.
Access to labour is important because businesses need workers to produce their products. If a business locates in an area where there is a shortage of skilled labour, it may have to pay higher wages to attract and retain workers. Businesses may also need to invest more in training. This can increase labour costs and reduce profitability. For example, a car manufacturing plant requires skilled engineers and technicians. Locating in an area with a shortage of skilled workers could lead to higher recruitment costs and potential delays in production.
However, businesses can use machinery to replace some labour. This is known as capital-intensive production. For example, a company that makes computer chips may use robots to assemble the chips. This can reduce the importance of access to labour in the location decision. In this case, other factors such as access to raw materials and government incentives might take priority.
Other factors, such as good transport links are important to ensure that a business can receive raw materials and distribute finished products efficiently. Proximity to the market can also be important for reducing transport costs and delivery times. For example, a business that produces fresh food may need to locate near its customers to ensure that its products are delivered fresh. The availability and cost of land is another important consideration. A business may need a large amount of land to build a factory. If land is scarce or expensive, it may make more sense to locate the factory in a different area.
Government influence, such as tax breaks or grants, can also influence location decisions. Some governments offer incentives to encourage businesses to locate in specific areas, particularly areas with higher unemployment. For example, the UK government offers incentives for businesses to locate in Enterprise Zones, which are designated areas with tax breaks and other benefits.
Ultimately, the most important factor for a manufacturing business to consider when deciding where to locate a new factory will vary depending on the specific business and its needs. For a labour-intensive business, such as a clothing manufacturer, access to labour is likely to be the most important factor. However, for a more capital-intensive business, other factors such as access to raw materials and transport links may be more important. Businesses need to weigh all of the factors carefully before deciding where to locate a new factory.
**Sources:**
- OCR GCSE Business Studies Textbook
- Edexcel GCSE Business Studies Textbook
Do you think access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory? Justify your answer.
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Do you think access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory?
When a manufacturing business is deciding where to locate a new factory, there are many factors to consider. Access to labour is one important factor, but transport links, proximity to the market, access to raw materials, government influence and the availability of land are also important.
Access to labour is important because businesses need workers to produce their products. If a business locates in an area where there is a shortage of skilled labour, it may have to pay higher wages to attract and retain workers. Businesses may also need to invest more in training. This can increase labour costs and reduce profitability. For example, a car manufacturing plant requires skilled engineers and technicians. Locating in an area with a shortage of skilled workers could lead to higher recruitment costs and potential delays in production.
However, businesses can use machinery to replace some labour. This is known as capital-intensive production. For example, a company that makes computer chips may use robots to assemble the chips. This can reduce the importance of access to labour in the location decision. In this case, other factors such as access to raw materials and government incentives might take priority.
Other factors, such as good transport links are important to ensure that a business can receive raw materials and distribute finished products efficiently. Proximity to the market can also be important for reducing transport costs and delivery times. For example, a business that produces fresh food may need to locate near its customers to ensure that its products are delivered fresh. The availability and cost of land is another important consideration. A business may need a large amount of land to build a factory. If land is scarce or expensive, it may make more sense to locate the factory in a different area.
Government influence, such as tax breaks or grants, can also influence location decisions. Some governments offer incentives to encourage businesses to locate in specific areas, particularly areas with higher unemployment. For example, the UK government offers incentives for businesses to locate in Enterprise Zones, which are designated areas with tax breaks and other benefits.
Ultimately, the most important factor for a manufacturing business to consider when deciding where to locate a new factory will vary depending on the specific business and its needs. For a labour-intensive business, such as a clothing manufacturer, access to labour is likely to be the most important factor. However, for a more capital-intensive business, other factors such as access to raw materials and transport links may be more important. Businesses need to weigh all of the factors carefully before deciding where to locate a new factory.
**Sources:**
- OCR GCSE Business Studies Textbook
- Edexcel GCSE Business Studies Textbook
Extracts from Mark Schemes
Question:
Do you think access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for a justified decision as to whether access to labour is the most important factor for a manufacturing business to consider when deciding where to locate a new factory.
Points:
Access to labour:
- Skilled labour may be difficult to find/recruit, which could increase recruitment/labour costs, but can use machinery to reduce the need for labour.
- Labour-intensive production requires access to labour; without labour, they cannot operate.
- Can depend on the type of workers required; unskilled workers may be easy to find.
Other factors might include:
- Good transport links to ensure products arrive/sent when needed.
- Proximity to market to ensure sales/revenue can be made.
- Type of product; a fragile/heavy product may need to be closer to customers to reduce risk of damage/cost.
- Access to raw materials/components so production is not delayed.
- Availability/cost of suitable land, which could restrict the size of the factory/limit output/increase fixed costs.
- Government influence or examples, e.g., government grants can help reduce costs whereas legal controls could prevent the business from locating in certain areas.
Justification:
Skilled labour may be difficult to find, which could increase recruitment costs. Factory machinery can replace some labour, reducing the importance of labour in the location decision. Labour is the most important factor if the business is labour-intensive because without labour, the new factory cannot produce output. However, other factors would be of greater importance in a new capital-intensive factory.