Factors controlling a quarry's profit

Abstract

Business profits are controlled by natural and technological parameters, besides human factors, and these vary from industry to industry. This study investigates the natural factors that influence the profitability of the quarries used for extraction of raw materials for building industries. The study covers 70 profit- and loss-making quarry enterprises operating in 2008; 50 of them operating in 2009. These quarries, which are located in seven countries of Central and Eastern Europe, are owned by a major international company. Discriminant analysis was used for classifying these enterprises as profit- or loss-making enterprises. As inputs for the analysis, eight standard company procedure monitoring parameters and two parameters acquired by special inquiries were used. The results show that profitability of the quarries is controlled primarily by human factors (organisation and management of quarry operations) and the tenure of the quarry, i.e. the period for which the enterprise was in the possession of the company. Natural factors play a secondary role in controlling sales revenue.