Observation

Few candidates attempted this question, majority of whom scored relatively high marks. Candidates were required to explain five factors to be considered when establishing a shoe producing firm. Most candidates were able to explain the factors to be considered when establishing a shoe producing firm.

Candidates were expected to state thus to score maximum marks in this question.

(i)         Funding: One of the most important factors to consider is the source of capital to fund the business.
(ii)        Transportation System: A firm must be located where there is good transportation                                        infrastructure like roads and rails to convey the firm’s raw materials and finished                          goods.
(iii)       Availability of labour: The firm must be established in a location where there is a large pool of skilled, semi-skilled and unskilled labour to carry out the firm’s productive activities.
(iv)       Market: The firm must be established in a location that is close to a ready market for shoes so as to boost sales and help to achieve its major motive of making profit.
(v)        Power: The firm must be located in an area where power is readily available to power its plant and machineries so as to prevent disruptions in the production process and to reduce the cost of running generating plant.
(vi)       Raw materials: the firm must be located where leathers are readily available so as to ensure the major raw material for its production is never in short supply.
(vii)      Government policy: the firm must be located in an area that enjoys favourable government policies and incentives like tax holidays and subsidies.