Deck 16: Facilities: Making Location and Layout Decisions

Question 1

Facility-related decisions must be right the first time since they are difficult and sometimes impossible to change after they've been made.

Answer 1

True

Question 2

Profit margin, but not ROA, is affected by facility productivity through net income.

Answer 2

False

Question 3

Location and layout are difficult to optimize as there is often no agreement on a single measure of performance.

Answer 3

True

Question 4

Location decisions must consider global alternatives, but can sometimes be motivated by unethical and exploitive goals.

Question 5

When line balancing, one should never exceed the theoretical minimum number of work centers.

Question 6

Even though the multi-factor rating technique appears subjective, it is a very objective process.

Question 7

The cut and try approach to obtaining a good layout starts with a total distance matrix for each pair of departments.

Question 8

The key to high levels of productivity in product-oriented layouts is to balance the times required of each workstation in a process.

Question 9

Cellular layouts require that a family of parts be produced in a "cell" that has all of the resources necessary to produce all of the parts in the family.

Question 10

In a line balancing problem, the theoretical minimum number of work centers is never attainable.

Question 11

Which of the following statements is true about strategic the importance of facilities?

A) Profit margin and ROA are not affected by facility productivity.
B) Value attributes affected by facilities include response time, dependability of delivery, convenience, ethical issues and flexibility.
C) From a strategic perspective, the facilities decisions are addressed by four broad decision categories: . the location, size, layout, and distance of the facility.
D) There is usually a single correct answer for facilities decisions.

Question 12

Which of the following location characteristic does not relate to quality of life?

A) Climate
B) Education
C) Recreation
D) Nearness to large city
E) Availability of money

Question 13

Which of the following is not typically an option when expanding a business?

A) Expanding the current facility
B) Building a newer and bigger facility elsewhere
C) Becoming a multi-facility business
D) Improving processes so that they take less space

Question 14

Reasons for locating a facility in a foreign country tend to be driven by:

A) Tax advantages
B) Higher labor costs off shore
C) Improved transport time from off shore
D) Greater political stability of other countries

Question 15

Which of the following statements is true regarding location decision criteria?

A) For most manufacturing and service businesses, the capabilities, talent and expertise of the workforce is . important when making location decisions.
B) Since labor costs vary from one location to another, labor costs cannot be used as decision criteria.
C) Quality of life issues are usually not considered in the relocation decision.
D) The low-cost location will always be the location choice.

Question 16

Which of the following statements is true about location decision-making techniques?

A) For the most part, location decision techniques are single-purpose decision-making tools that areV. designed specifically for the location decision scenario.
B) No technique can provide an optimal solution, because there is no optimal solution.
C) In many cases location decisions can only be evaluated after the fact.
D) Location decision-making techniques are objective and quantitative.

Question 17

The multifactor rating approach

A) Requires management to rank factors according to strategic goals
B) Uses factors weighted from 1 to 10
C) Requires decision-makers to give all factors a score, for each alternative
D) Must weight factors equally

Question 18

A technique for making location decisions by identifying expected revenues associated with each alternative is referred to as:

A) Breakeven analysis
B) Decision tree analysis
C) The SLP method
D) Multi-factor rating
E) None of the above

Question 19

In the SLP technique, a closeness rating of E stands for:

A) Extremely necessary
B) Essential
C) Especially important
D) Extremely unnecessary
E) None of the above

Question 20

Which of the following statements is not true about process-oriented layouts?

A) They are characterized by functional departments.
B) A primary objective is to locate departments that interact the most close to each other.
C) Approaches used to develop process-oriented layouts include cut and try approach and line balancing.
D) They enable the firm to adapt the sequence of operations to meet particular needs of customers who . desire a customized product or service.
E) The product-oriented layout has greater flexibility.

Question 21

The technique that utilizes "closeness desirability" ratings is called:

A) Line balancing
B) CRAFT
C) Systematic layout planning
D) Cut and try approach
E) Preferential approach

Question 22

Which of the following statements is true about improving a product-oriented layout?

A) A key to high-level productivity in product-oriented layouts is the relative location of departments.
B) Line balancing appears to be very precise on paper, but is less precise in practice because of variability.
C) In order to determine how the elements will be grouped into workstations, the maximum number of . workstations must be determined first.
D) Maximizing balance delay will improve product-oriented layout productivity.

Question 23

In service layouts

A) The objective is to enhance the efficiency of customer movement.
B) That utilize a product-orientation, high volumes of customers can be served.
C) That are process-oriented, the goal is to maximize flow.
D) That utilize a product-orientation, queues of customers can develop at each functional department.

Question 24

An example of a business input that might be critical for a business to locate near is

A) Data-base access
B) Employee talent
C) Online customers
D) Internet Access

Question 25

Locating a business near B2B customers

A) Is not necessary with today's transportation systems
B) Is important only for high volume producers.
C) Is a common approach to improving product quality.
D) Can reduce response time to customers.

Question 26

GIS systems combine the technologies of

A) Decision analysis and subjective criteria
B) Statistical analysis and data mining
C) Statistical analysis and geographic positioning systems.
D) Statistical databases and mapping

Question 27

A weakness of multi-factor rating is that

A) Factors are often omitted
B) Scoring errors are common
C) Importance weightings and scoring can be very subjective
D) Accurate data are impossible to obtain

Question 28

The frequency of a product being completed in a product-oriented layout is

A) The production lead time
B) The response time
C) Can only be maximized by the minimum number of workcenters
D) The cycle time

Question 29

_____ and _____ are both affected by facility productivity through net income.

Question 30

From a strategic perspective, the facility decisions are addressed by: _______, _______, and _______ of the facility.

Question 31

Location decisions must consider _______ alternatives, but can sometimes be motivated by result of_______ and ______ goals.

Question 32

________ _______ technique not only provides guidance for the decision but also forces decision-makers to consider everything.

Question 33

A process-oriented layout is characterized by ______ departments.

Question 34

The primary objective in determining the relative locations of departments in a process-oriented layout is to locate departments that interact the most ______ to each other.

Question 35

A _____ _______ rating of X means that the departments should not be close to each other.

Question 36

The low utilization that results from the differences in processing time is known as _____ ______.

Question 37

Cellular layouts offer a compromise between ______ and _______ layouts.

Question 38

Match these items.

-Multi-factor rating

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 39

Match these items.

-Systematic layout planning

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 40

Match these items.

-Cellular layout

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 41

Match these items.

-Break-even analysis

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 42

Match these items.

-Production time available per day divided by the units of output required per day

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 43

Match these items.

-Line balancing

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 44

Match these items.

-Service layouts

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 45

Match these items.

-General purpose decision-making technique

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 46

Match these items.

-Balance delay

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 47

Match these items.

-"Cut and try" approach

A) Approach to process-oriented layout
B) Low utilization that results from the differences in processing times
C) Decision tree
D) Helps to improve product-oriented layout
E) Compromise between product-oriented and process-oriented layout
F) Cycle time
G) Uses "closeness-desirability" ratings
H) Considers variety of factors with different levels of importance
I) Move customers to increase exposure
J) Comparing alternatives that have different fixed and variable costs

Question 48

As part of business reengineering, your department has been asked to balance a revised assembly operation to achieve an output of 250 units per eight-hour day. Task times and precedence relationships are presented below. $\begin{array}{ccc} \text {Task} &\text { Task Time (minutes)} & \text {Immediate Predecessors} \\ \mathrm{A} & 0.3 & \mathrm{B} \\ \mathrm{B} & 0.5 & \mathrm{D} \\ \mathrm{C} & 0.2 & \mathrm{D} \\ \mathrm{D} & 1.2 & \mathrm{E} \\ \mathrm{E} & 0.1 & \mathrm{G} \\\mathrm{G} & 1.0 & \mathrm{H} \\ \mathrm{H} & 1.2 &\text { End}\end{array}$
Based on the information:
A. Determine the cycle time
B. Determine the theoretical minimum number of workstations.

Question 49

A manager is evaluating three possible locations for a new retail outlet. The data for the three locations (10 points maximum score) are outlined in the table. $\begin{array}{lccc} \text {Factor }& &\text { Scores } \\&\text {Location A }&\text {Location B }&\text {Location C }\\\text {Convenient} & 9 & 6 & 5 \\\text {Parking facilities }& 7 & 5 & 7 \\\text {Display area }& 5 & 9 & 8 \\\text {Shopper traffic }& 6 & 7 & 6 \\\text {Operating costs} & 5 & 7 & 6\end{array}$

A. If each factor were given the same weight, which location would be the best?
B. If the shopper traffic and operating costs were assigned double the weights of the other factors, which location would be the nest?