Page 243 - Cambridge IGCSE Business Studies

18: Location decisions

Revision checklist Exam practice questions

● There are several factors that owners or 1 Aisha is a qualifi ed hairdresser. She has always dreamed
managers should consider when making a of owning her own hairdressing salon. Her parents
location or relocation decision. have offered to loan Aisha the money she needs. She is
● Location decisions require a business to considering two possible locations for her business. Aisha
balance the benefits against the limitations will be a sole trader.
so that the best decision is made which will
maximise long-term profits. a What is meant by ‘sole trader’? [2]
● In addition to quantitative and qualitative b Identify two disadvantages to Aisha of being a
factors, businesses must also consider any sole trader. [2]

legal controls affecting location decisions.
c Identify and explain two reasons why Aisha might
want to own her own business. [4]
d Identify and explain two factors Aisha should
consider when choosing the location for her
hairdressing salon. [6]

e How important do you think the right location
will be to the success of Aisha’s business?
Justify your answer. [6]

2 Triton Electrics (TE) is a public limited company. It
manufactures electrical goods, such as microwave ovens, 241
in two factories in Country X. TE employs 500 workers.
The directors of TE are considering relocating the
production of all their products to Country Y. The Head
Offi ce will remain in Country X.

a What is meant by ‘directors’? [2]

b Identify two features of a public limited company. [2]
c Identify and explain two legal controls that might
affect location decisions in Country Y. [4]
d Identify and explain how any two of TE stakeholders
might be affected by the proposed relocation of TE. [6]

e Do you think TE should relocate their manufacturing
to Country Y? Justify your answer. [6]

Total available marks 40