The optimal location for a factory manufacturing a bulk-gaining product is likely to be one that minimizes the cost of transporting the product to the market.

Question

Quizplus · Accepted Answer

This is because bulk-gaining products are those that increase in weight or volume during production, such as soft drinks or cars. Thus, it is more cost-effective to locate the factory closer to the market to minimize transportation costs. This is in contrast to a bulk-reducing product, such as lumber, where it is more cost-effective to locate the factory closer to the source of raw materials.

The Optimal Location for a Factory Manufacturing a Bulk-Gaining Product