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IB Business Management · Operations management

Location practice questions.

37 exam-style questions on Location — topic 5.4 of Operations management in the IB Business Management syllabus — with answers and explanations. Samples below; the full set is free with an account.

At a glance

About this topic

Syllabus code
5.4
Subject
IB Business Management
Unit
5 · Operations management
Questions
37 with worked answers
Question types
15 multiple-choice questions · 8 fill-in-the-gap questions · 7 true/false questions · 5 flashcards · 2 matching tasks
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Sample questions on Location

A manufacturer decides to relocate its plant nearer to its raw material suppliers to cut transport costs on heavy inputs. State the type of location factor that is driving this decision.

  • A quantitative factor
  • A qualitative factor
  • A government incentive factor
  • An ethical factor

Answer: A quantitative factor

Transport costs that can be measured in monetary terms are a quantitative location factor; qualitative factors (e.g. manager preference, quality of life) cannot be measured directly in money.

Which of the following is the clearest example of a qualitative factor influencing where a business locates?

  • Availability of government subsidies
  • The cost of land per square metre
  • The founder's preference to stay near home
  • Local wage rates for skilled labour

Answer: The founder's preference to stay near home

The founder's personal preference cannot be measured in monetary terms, making it a qualitative factor; subsidies, land cost and wage rates are all quantitative.

A firm moves a manufacturing process from an overseas contractor to a supplier in its home country. Identify the term for this decision.

  • Offshoring
  • Reshoring
  • Insourcing only
  • Ansoff diversification

Answer: Reshoring

Reshoring (also called onshoring) is returning previously offshored operations to the home country, often due to rising foreign wages, quality concerns or transport risk. The work stays with an outside supplier, so it is not insourcing.

Explain why a coffee shop chain would prioritise footfall and visibility over land cost when choosing a location. Which statement best captures the reasoning?

  • It is a capital-intensive manufacturer needing cheap land
  • As a retail business, revenue depends on passing footfall
  • It must be near raw material suppliers to lower transport costs
  • Government grants are only available in high-footfall areas

Answer: As a retail business, revenue depends on passing footfall

Market-oriented retail and service businesses locate near customers because sales depend on convenient access and footfall, even if prime sites cost more.

Distinguish which of these is primarily an ethical or sustainability consideration in a location decision, rather than a purely financial one.

  • Choosing a site with the lowest carbon footprint
  • Selecting the cheapest available industrial rent
  • Locating where corporate tax rates are lowest
  • Picking a site with the lowest local wage rates

Answer: Choosing a site with the lowest carbon footprint

Minimising the carbon footprint reflects sustainability/ethical concerns; the other options are financial cost-minimising factors.

Suggest one reason a government might offer grants or tax breaks to attract a firm to a particular region.

  • To increase the firm's variable costs
  • To reduce local employment
  • To create jobs and boost the region
  • To force the firm to raise prices

Answer: To create jobs and boost the region

Governments use incentives to attract investment that creates jobs and boosts economic activity in a region, often one with high unemployment.

That was 6 of 37 Location questions.

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37 Location questions — free with an account. Spaced repetition, streaks and full exam simulations included.

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