You have decided to open a company that produces wooden furniture, and you must select a suitable location for production.  The first option is in a remote region of Montana with easy access to...

You have decided to open a company that produces wooden furniture, and you must select a suitable location for production.  The first option is in a remote region of Montana with easy access to abundant raw materials but far away from a skilled worker base.  The second option is in Southern California, in close proximity to many skilled workers and several major highways for distribution but not close to raw materials.  Which location would you choose for your business and why? Answer must demonstrate mastery of the topic.

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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In terms of starting up a business predicated upon producing wooden furniture, there are some elements that have to be addressed.  The first would be that many hypotheticals could be injected into this particular scenario to make both choices seem plausible.  I believe that land and labor go hand in hand in a business such as producing wooden furniture.  Craftsmanship in the form of skilled labor is important because of the value it adds to the product, while land in the form of the resource of wood is essential to the tables being generated.  

In the form of the situation, I think that it is essential to be close to the abundance of raw materials.  Workers are still available in the Montana setting, as the situation does not indicate that they are non- existent.  The reality is that they are not skilled. However, there is little indicating that they could not become skilled.  The money saved from having to transport wood to different locations might help to develop training and professional development initiatives to help move the workforce into becoming more skilled.  At the same time, the abundance of resources could enable a product to be produced at a large level with some level of competence that has a chance at generating a profit.  At the very least, one is not having to spend money on transportation for natural resources, which almost puts the company in a deficit situation even before anything is produced.  The situation does not indicate that craftsmanship at a high level is automatically associated with profitability, so it could be that the production of wooden furniture at the hands of workers who have received training could be sufficient enough to develop a niche in the marketplace.  

Land becomes the critical element here because natural resources cannot be constructed in any setting.  One has to devise their approach in accordance to where land and resources exist.  In terms of the Southern California location, while the skilled craftsmanship is evident, the need to transport resources to the workforce helps to put strain on a fledgling business even before the first product is assembled.  I think that this reality is what guides the need to choose the Montana site with the abundance of resources. 

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