JUST caught up with this entry--sorry to be so late.

An overall-costs study should demonstrate that cost-of-distribution from a Mid-South (roughly: near the Mississippi/Ohio/Missouri Rivers junction) location will be less than cost-of-distribution from other domestic locations, assuming 1) national distribution and 2) roughly equal product-shipments to all areas of the country.

I think Fred Smith of FedEx thunk that up. It's the hub/spoke pattern.

Granted, that cost is a marginal one in the Big Picture for someone like Merc. Purchased-goods is usually the dominant cost on any P&L for a manufacturer.

But when you're looking at 20+ years in a given location and measuring total return, it's a consideration.

Direct-labor cost, BTW, is usually a very small component on the P&L.
dad29 | Homepage | 11.26.09 - 11:13 am | #