Deck 8: Service Facility Location

Question 1

Geographic information systems are a visual method of displaying data.

Answer 1

True

Question 2

When a customer travels to the service facility, the direct cost that is incurred is the decrease in potential customer demand that occurs as a result of the distance traveled.

Answer 2

False

Question 3

The Huff model for retail outlet location postulates an inverse relationship between the attractiveness of a location and the travel time to that location for a particular customer.

Answer 3

True

Question 4

The success of L.L. Bean questioned the necessity of always finding a location that is convenient for customers' physical access.

Question 5

The metropolitan metric method of measuring distance is described as travel "as the crow flies."

Question 6

Finding a unique set of sites in a multi-location problem is a simple extension of the methods used for single facility location.

Question 7

Saturation clustering occurs when service firms locate their business near their competitors because they expect a high level of customer traffic.

Question 8

The advantage of substituting communication for travel becomes possible when face-to-face interaction between server and customer is not necessary.

Question 9

The absence of quantifiable criteria considerably diminishes the importance of facility location methods in the public sector.

Question 10

Use of center of gravity formulas for solving the single-location problem is incorrect.

Question 11

The location set covering problem locates facilities to minimize the distance that the most distant customer would travel to reach a facility (known as maximal service distance).

Question 12

Cross-median is an approach to the location of a single facility using the metropolitan metric to maximize the total distance traveled.

Question 13

Locating a public service facility in an area that contains a large number of individuals for whom distance would be a strong barrier will maximize facility utilization.

Question 14

The Euclidian location model is used when vector travel is involved.

Question 15

The Euclidian metric is used for locating a facility in an urban area.

Question 16

The choice of location criterion has little effect on the site selected.

Question 17

For a multisite location problem, the services to provide at each site might vary.

Question 18

The median has the property of minimizing the sum of absolute deviations from it.

Question 19

The greedy algorithm is a solution procedure that is used for measuring the attraction of a customer to a facility.

Question 20

Marketing intermediaries are business entities in the channel of distribution between the final customer and the service provider.

Question 21

A cruise line has the option of locating its dock in Miami or Pensacola because both cities have adequate port facilities. Which of the following considerations would seem to be the most germane?

A) Adequate parking.
B) Location of competitors.
C) Freeway access to the port.
D) City served by major airport.

Question 22

In the Huff retail location model, the value of λ estimates______.

A) amount of travel time to reach a service facility
B) the importance of convenience in attracting customers
C) the importance of travel time in attracting customers
D) the cost of transportation for a customer

Question 23

Site selection considerations include all but one of the following: ________.

A) access
B) environment
C) government
D) weather

Question 24

The optimization criteria governing the location of a service facility is determined mainly by the ________.

A) ownership of the service, i.e., public or private
B) kind of service, e.g. food, banking, or postal
C) number of facilities to be located
D) average size of the facilities to be located

Question 25

A strategy defying the curse of cannibalization is called ________.

A) competitive clustering
B) customized marketing
C) saturation marketing
D) relationship marketing

Question 26

With respect to service facility location, it is not prudent to open ________.

A) a new facility next to one's competitors
B) multiple facilities within the same area, thus cannibalizing one's own business
C) an information-based service in a downtown area with high real estate prices
D) All of the above

Question 27

Cross-median approach is used for ________ location.

A) single facility
B) multiple facility
C) single facility and multiple facility
D) none of the above

Question 28

If you are going to open four facilities and have identified six candidate locations, how many different combinations of site selections are there?

A) 4
B) 6
C) 15
D) 24

Question 29

Car dealerships often are located near one another along a "motor mile" to allow customers to make comparisons. This location strategy is known as ________.

A) competitive clustering
B) saturation marketing
C) marketing intermediaries
D) competitive positioning

Question 30

ArcGIS, a GIS for business applications, finds applications in all but one of the following: ________.

A) mapping customer databases
B) determining site locations
C) forecasting demand
D) improving delivery service

Question 31

Competitive clustering is common to the ________ industry.

A) healthcare
B) lodging
C) communications
D) banking

Question 32

In the decision to locate a public health clinic, which one of the following criteria is not appropriate?

A) Maximize utilization.
B) Minimize distance per capita.
C) Minimize distance per visit.
D) Minimize cost.

Question 33

The disadvantage of saturation marketing lies in which of the following areas?

A) Increased advertising costs.
B) Cannibalization.
C) Increased requirement for supervision.
D) Reduction in customer awareness.

Question 34

The ________ is a variation on the location set-covering problem.

A) Huff model
B) Greedy algorithm
C) maximal covering algorithm
D) shortest-path tree

Question 35

The following marketing phenomenon occurs when there exists within two city blocks the following hamburger outlets: McDonald's, Burger King, Sonic, and Wendy's: ________.

A) competitive clustering
B) customized marketing
C) saturation marketing
D) relationship marketing

Question 36

A strategy of locating sites in a number of states (or countries) can reduce the overall risk of financial crisis from a regional economic downturn. This strategic approach to facility location is known as ________.

A) competitive positioning
B) flexibility
C) demand management
D) focus

Question 37

The concept of focus in location decisions considers all but one of the following issues: ________.

A) cannibalization
B) multisite locations
C) formula facility
D) competitive changes

Question 38

A strategy that can be used by urban retailers to locate multiple sites close to each other in high-density areas despite the potential for cannibalization is called ________.

A) competitive clustering
B) marketing intermediaries
C) saturation marketing
D) saturation clustering

Question 39

Which of the following items does the Huff retail location model not consider?

A) The degree of accessibility.
B) Travel time from the customer's location to the facility.
C) Facility size.
D) A parameter reflecting the importance of travel time by customers.

Question 40

The following are important in estimating spatial demand except ________.

A) defining the target population
B) selecting a unit of area
C) developing a visual representation or map
D) distance traveled