Company name
manager(s) workers premises
Acme Ltd
company type engineering location
Causton (pop. 10,000) 1 (Fred Goodwin)
3 skilled, 10 unskilled 5,000 sq. m.
raw materials imported by sea limits to growth can’t recruit skilled or unskilled staff; can’t rent factory units
sales to Britain exports
last year this year
Figure 1: Sales units this year
6,000 5,000 4,000 3,000 2,000 1,000 0
sales to Britain
year before last
4,425 4,678 5,320
exports
580 976
1,800 Figure 2: Sales units for last three years Case Study 1: Relocation of Acme Ltd
The purpose of this report is to make a recommendation to the owner of Acme Ltd. The company is considering relocation from Causton to Bellport. In this report, I examine the case for and the case against relocation and make a recommendation. Acme Ltd is a small engineering company. It is located in the small town of Causton, which has a population of 10,000. The company employs 14 people, including three skilled workers and ten unskilled workers. The company occupies premises of 5,000 square metres. It imports raw materials by sea. It sells 75 per cent of its finished goods to customers in Britain, and exports 25 per cent of its finished goods to Europe. The company is expanding rapidly. In the last year, total sales have increased by 46 per cent. The company now needs skilled and unskilled workers to deal with the increase in demand. It also needs additional factory units but cannot rent them in Causton. There are several factors in favour of a move to Bellport. Firstly, Acme Ltd should find it much easier to recruit staff in Bellport, because the town is much larger than Causton. In addition, the unemployment rate in Bellport is ten per cent, whereas it is only three per cent in Causton. Secondly, the company needs to acquire more factory space. There are more factory units to rent in Bellport than Causton. Thirdly, the company sells most of its finished goods inside Britain at the moment. There is a major motorway close to Bellport which links the city to London and the rest of the country. Finally, there is a relocation grant of £2,000 per person. This is a government incentive to bring business to Bellport. There are also two factors against relocation to Bellport. Firstly, salaries are not as high in Causton as in Bellport. The company will pay about 25 per cent more in salaries if they relocate. Secondly, rental costs of factory units are higher in Bellport than Causton. The company will pay 100 per cent more in rent for the same size of unit. I recommend relocation to Bellport. The company will be able to recruit more staff and acquire additional factory space in the city. It will also benefit from cheaper import costs and cheaper transportation costs inside Britain. These benefits outweigh the drawbacks, which include higher salary costs and higher rental costs.
Theme 3:Writing 95
units
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