Reduced shipping expenses
By locating the factory near the tire manufacturer, the transportation costs of tires would be reduced. As they are situated near to each other therefore they can easily order tires and with cost, they are also saving the time of production units and delivery time.
During this period of time, they order the tires. they limit their production. But as this production limits, they limit their margins.
By the location, they can control many things such as Production, Transportation cost, etc.
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