1.4.2a Proximity to market, labour, materials and competitors Quiz: Pearson Edexcel Business, Unit 4

The 20 questions

1. Which factor relates to being close to customers when choosing a business location?

   • Impact of the internet
   • Availability of parking for staff only
   • Nature of the business activity
   • Proximity to market

2. A business that needs large quantities of heavy raw materials would most likely locate:

   • Close to the source of its raw materials, to reduce transport costs
   • Far away from any suppliers, to keep costs as low as possible
   • In the centre of a city with the most offices, regardless of suppliers
   • At a distance from its competitors, so that it can avoid all competition

3. Why might a business want to be close to its competitors?

   • To avoid any risk of customers seeing its prices, so that rivals cannot compare what it charges
   • To make sure it has no need for any suppliers at all, because rivals can supply all of its needs
   • Because customers may compare products and visit an area where similar shops are found
   • To ensure the government gives it a grant to start trading in an area where many firms already operate

4. Which location factor is most important for a business that relies on skilled workers?

   • Proximity to the sea for shipping
   • Proximity to the internet only
   • Proximity to labour
   • Proximity to the owner's home

5. A café is looking for a site. Which of these would be the most important location factor?

   • Being far from any other food outlets to avoid any competition whatsoever
   • Being near to a large factory that has no staff and no workers
   • Being close to a main supplier of coffee beans in another country
   • Being near to the market, meaning customers passing the premises every day

6. A furniture manufacturer buys timber from a forest 200 km away. Which location factor should it consider?

   • Proximity to materials, to reduce the cost of transporting heavy timber
   • Proximity to the labour market, because a furniture maker needs many workers in the local area
   • Proximity to the internet, because furniture is sold online only to customers in cities
   • Proximity to the competitor's office, to share the costs of premises and office staff

7. Which of these is a 'nature of the business activity' factor?

   • A service business such as a hairdresser needs to be near its customers
   • A government department decides where to locate its offices in the regions of the country
   • A business's bank decides which area is most profitable for it to set up in and expand
   • A business's accountant insists that it moves to a new county to reduce its tax bill

8. A manufacturer needs a large, cheap site to build a factory. Which location factor is most relevant?

   • Proximity to an art gallery so that staff can visit at lunchtime
   • Nature of the business activity and access to space at a lower cost
   • Proximity to the competitor's shops only
   • Proximity to the owner's family home only

9. Why might a business consider the availability of labour when choosing a site?

   • A business never needs to hire staff once it has chosen a location
   • A business is required by law to employ people from the same town
   • A business with skilled work needs staff with the right skills nearby
   • A business can only locate near a university if it hires graduates

10. Which location is most likely to suit a business that sells to customers across the country online?

    • A site in the middle of a field with no road access at all, so that the business avoids all traffic
    • A premises near one single competitor's shop, so that customers can compare the two businesses easily
    • A fixed premises in a busy shopping street with heavy footfall from people walking past every day
    • A warehouse near a major transport network, with little need to be near customers

11. A business chooses a location that is close to its suppliers and to its market. Which is the main reason for this choice?

    • It guarantees the business will receive a grant from the government
    • It removes any need for the business to advertise its products
    • It ensures the business avoids paying any rent on its premises
    • It reduces transport costs and makes deliveries quicker

12. Which of these is an advantage of being located near competitors?

    • Competitors will supply all of the business's raw materials at no cost whatsoever
    • Competitors will always share their pricing decisions with the business in advance each year
    • Customers may travel to a cluster of similar businesses, bringing more visitors
    • Competitors will not be able to change their prices in response to a change in demand

13. A business that needs a large amount of workers with specialist skills should locate near:

    • A place with the lowest possible rent, regardless of the labour market
    • A competitor who may be selling the same product at a lower price
    • The owner's home, so that the owner can manage staff personally
    • A town with an available pool of workers who have those skills

14. Which factor is the main concern for a bakery that makes bread daily and sells it locally?

    • Proximity to materials from overseas, which take months to arrive
    • Proximity to the head office of its franchisor in another country
    • Proximity to a stock exchange, to raise share capital
    • Proximity to the market, so fresh goods reach customers quickly

15. Which of these is a disadvantage of locating close to competitors?

    • Customers can easily compare prices and may choose a rival instead
    • The business has to pay higher wages because staff are always available
    • The business will receive free advertising from its competitors
    • Customers cannot find the business, because the area is always crowded

16. A business owner says: 'We need to be near our main supplier of components.' What does this reveal about the owner's priorities?

    • The owner is focusing on the internet as the key location factor
    • The owner is focusing on proximity to the market for final sales
    • The owner is focusing on the nature of the business's owners and shareholders
    • The owner is focusing on proximity to materials to reduce delivery costs

17. A mining company needs to locate near the ore it extracts. Which location factor best explains this?

    • Proximity to competitors, because the mine must avoid any other mining companies
    • Proximity to the market, because it sells its ore to customers in cities
    • Proximity to materials, because the mine must be located where the resource is found
    • Proximity to the internet, because all mining is now managed online

18. Which statement best describes 'proximity to market'?

    • Being located close to the customers the business wants to sell to
    • Being located in a region with no other businesses at all
    • Being located next to the business's bank so that it can borrow more money
    • Being located far from customers so that the business avoids all sales

19. A firm that makes bulky goods from heavy steel should locate near which factor?

    • Its owner's home town, regardless of how much it costs to move the heavy materials
    • The most expensive shopping street in the region, to attract passing trade
    • The sea, so that customers can collect the goods by boat from the harbour
    • Its steel suppliers, to cut the cost of moving heavy materials

20. Which location factor is most relevant to a call centre that needs many trained staff?

    • A site with the lowest possible local council tax only
    • Being in the same town as the factory's raw materials
    • Close proximity to a major river for its water supply
    • Access to a large labour pool with the right skills

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