Deck 8: Location Planning and Analysis

Question 1

As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives under consideration when the composite scores are below the minimum threshold value.

Answer 1

True

Question 2

The center of gravity method is useful in location planning for the location of a distribution center.

Answer 2

True

Question 3

The first step in developing location alternatives is identifying important factors.

Answer 3

False

Question 4

Technology has made communication with global operations as easy as local communication.

Question 5

A strategy that emphasizes convenience for the customers would probably select a single very large facility.

Question 6

Advanced communications has aided globalization.

Question 7

Labor laws are an important site-related factor.

Question 8

Factor rating is limited to quantitative information concerning location decisions.

Question 9

You can't make a mistake by locating where labor costs are low.

Question 10

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

Question 11

Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

Question 12

For service organizations, the dominant factors in location analysis usually are market-related.

Question 13

For service and retail stores, a prime factor in location analysis is customer access.

Question 14

Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.

Question 15

The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are not overly important; one location typically is as good as another.

Question 16

The center of gravity method is a location planning technique that determines a composite score from weighted factor evaluation.

Question 17

An example of a regional factor in location planning is the location of our markets (either existing or potential).

Question 18

The lower cost of foreign labor is often offset by lower levels of productivity.

Question 19

The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal.

Question 20

Location decisions are basically one-time decisions usually made by new organizations.

Question 21

Some communities offer financial and other incentives to ______ new businesses.

A)Tax
B)Attract
C)Marginalize
D)Incorporate
E)Zone

Question 22

The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is:

A)cost-volume analysis
B)transportation model analysis
C)factor rating analysis
D)linear regression analysis
E)MODI analysis

Question 23

A one-hour photo processing machine in a Wal-Mart store is an example of a _________.

A)micro-factory
B)downsize strategy
C)diversified strategy
D)lean production system
E)falling price strategy

Question 24

Nearness to raw materials would be most important to a .....

A)grocery store
B)tax preparation service
C)manufacturing company
D)post office
E)hospital

Question 25

In location planning, the location of raw materials, the location of markets, and labor factors are:

A)regional factors
B)community factors
C)site-related factors
D)national factors
E)minor considerations

Question 26

An approach to location analysis that can include both qualitative and quantitative considerations is:

A)location cost-volume
B)factor rating
C)transportation model
D)expected value (net present value)
E)financial analysis

Question 27

Which statement best characterizes a typical search for location alternatives?

A)identify the best location choice
B)minimize cost consequences
C)maximize associated profits
D)locate near markets
E)identify acceptable locations

Question 28

One of the reasons for the importance of location decisions is its strategic importance to the supply chains.

Question 29

Location options don't usually include:

A)expansion
B)a contract
C)adding new facilities
D)moving
E)doing nothing

Question 30

The method for evaluating location alternatives which uses their composite (weighted-average) scores is:

A)cost-volume analysis
B)transportation model analysis
C)factor rating analysis
D)linear regression analysis
E)MODI analysis

Question 31

When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is ___________.

A)Linear programming
B)Consumer surveys
C)Factor rating
D)Transportation models
E)Center of gravity methods

Question 32

Which of the following is the last step in the procedure for making location decisions?

A)determine the evaluation criteria
B)identify important factors
C)develop location alternatives
D)evaluate alternatives and make a selection
E)request input regarding alternatives

Question 33

Facilities, personnel and operations that are located around the world are called:

A)non-domestic
B)diversified operations
C)globalization
D)worldwide presence
E)virtual organization

Question 34

The method for evaluating location alternatives which uses their total cost curves is:

A)cost-volume analysis
B)transportation model analysis
C)factor rating analysis
D)linear regression analysis
E)MODI analysis

Question 35

The center of gravity method is used to _______ travel time, distance and costs.

A)Normalize
B)Eliminate
C)Average
D)Minimize
E)Document

Question 36

Cultural differences, Customer preferences, Labor and Resources are factors relating to:

A)Regional choices
B)Site selection
C)Zoning
D)Product design
E)Foreign locations

Question 37

A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.

Question 38

Software systems known as GIS help in location analysis.The initials GIS stand for _______.

A)Graphic Interface Systems
B)Global Integrated Software
C)Graded Information Systems
D)Geo Intensive Software
E)Geographical Information System

Question 39

Which of the following is not a location option that management can consider in location planning?

A)expand an existing facility
B)add a new location
C)relocate from one location to another
D)do nothing
E)All are possible options.

Question 40

Location decisions are closely tied to an organization's strategies.

Question 41

What would be total annual costs for the Alpha Ave.location with twenty persons living there?

A)$5,400
B)$4,000
C)$5,000
D)$7,000
E)$9,000

Question 42

Which site would you prefer for a quantity of 20,000 units per year?

Question 43

Given the information below on scores of three location alternatives, which alternative would you recommend? Why?
A.

Question 44

Determine the optimum location for a distribution center to serve the following locations.Shipments to each location will be approximately equal.

Question 45

For what quantity would you be indifferent between selecting site B or site C?

Question 46

For the preferred site for 20,000 units per year, what would be your total costs?

Question 47

For what quantity would you be indifferent between selecting site A or site B?

Question 48

What are total costs for site B for a quantity of 5,000 units per year?

Question 49

What would be total annual costs for either location at the point of indifference?

A)$13,000
B)$13,350
C)$9,000
D)$17,000
E)$19,200

Question 50

If it is estimated that thirty persons will be living in this new chapter house, what would be the Skull's annual cost savings by selecting the less costly location, rather than the more costly?

A)$0
B)$1,500
C)$200
D)$150
E)$350

Question 51

A location analysis has been narrowed down to two locations, Akron and Boston.The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10.The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively.Given this information and a minimum acceptable composite score of 75, we can say that the manager should:

A)be indifferent between these locations
B)choose Akron
C)choose Boston
D)reject both locations
E)build a plant in both cities

Question 52

For what range of output would you prefer site A?

Question 53

For what range of output would you prefer site C?

Question 54

What are total costs for site C for a quantity of 5,000 units per year?

Question 55

A firm is trying to decide between two location alternatives, Albany and Baltimore.Albany would result in annual fixed costs of $60,000, labor costs of $7 per unit, material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit of $50.Baltimore would have annual fixed costs of $80,000, labor costs of $6 per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48.
(A) At an annual volume of 9,000, which would yield the higher profit?
(B) At what annual volume would management be indifferent between the two alternatives in terms of annual profits?

Question 56

For what range of output would you prefer site B?

Question 57

A manager must decide between two location alternatives, Boston and Chicago.Boston would have annual fixed costs of $70,000, transportation costs of $60 per unit, and labor and material costs of $200 per unit.Chicago would have annual fixed costs of $90,000, transportation costs of $40 per unit, and labor and material costs of $170 per unit.Revenue will be $300 per unit.
(A) Which alternative would yield the higher profit for an annual demand of 3,000 units?
(B) Would the two locations yield the same profit at a certain volume? If so, at what volume would that be?

Question 58

What are total costs for site A for a quantity of 5,000 units per year?

Question 59

Determine the center of gravity location for the destinations and shipping quantities shown below:

Question 60

If it is estimated that thirty persons will be living in this new chapter house, which location should the Skulls select?

A)Alpha Ave.
B)Beta Blvd.
C)either Alpha Ave.or Beta Blvd.
D)reject both Alpha Ave.nor Beta Blvd.
E)become a virtual organization

Question 61

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10.Location choice J has monthly fixed costs of $150,000 and per-unit variable costs of $9.At what volume would these locations have equal total costs?

A)30,000 units
B)25,000 units
C)40,000 units
D)50,000 units
E)60,000 units

Question 62

Which of the following is least important as a consideration for a firm at the beginning of a supply chain?

A)Access to end consumers
B)Access to resources
C)Proximity to customers
D)Access to transportation infrastructure
E)Access to productive labor

Question 63

If the annual demand will be 20,000 units, what would be the cost advantage of the better location?

A)$20,000
B)$460,000
C)$480,000
D)$80,000
E)$60,000

Question 64

If the amount of fabric shipped to each plant is equal, what is the optimal location for the fabric plant?

A)5, 5
B)6, 4
C)4, 6
D)6, 2
E)5, 4

Question 65

If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution center?

A)5, 5
B)5, 4
C)4, 5
D)5, 6
E)6, 5

Question 66

For the preferred site for 20,000 units per year, what would be your cost savings compared to each of the other two sites?
C.

Question 67

Which of the following circumstances would be least likely to lead to a need for a new location?

A)Shifting of markets.
B)Depletion of basic inputs.
C)Growth in demand that is leading to greater utilization of existing capacity.
D)The need to expand into new markets.
E)The opportunity to take advantage of globalization trends.

Question 68

If the decisions rule is to select the location with the greatest composite score exceeding 80, management should choose:

A)location A
B)location B
C)location C
D)either B or C
E)to reject all locations

Question 69

Weekly shipments to each warehouse will be: WH1, 100; WH2, 150; WH3, 120; WH4, 150; and WH5, 120.What is the optimal location of the distribution center?

A)5.1, 4.2
B)5.2, 4.0
C)5.1, 5.1
D)4.2, 5.1
E)4.9, 5.2

Question 70

What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?

A)$280,000
B)$140,000
C)$220,000
D)$300,000
E)$156,000

Question 71

If annual demand is estimated to be 20,000 units, which location should the company select?

A)Atlanta
B)Phoenix
C)either Atlanta or Phoenix
D)reject both Atlanta and Phoenix
E)build at both locations

Question 72

If the selection criteria is to be the greatest composite score, management should choose:

A)location A
B)location B
C)location C
D)either B or C
E)to reject all locations

Question 73

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10.What would its total cost be at a monthly volume of 250 units?

A)$105,200
B)$102,500
C)$100,250
D)$100,520
E)$105,500

Question 74

Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units.What is the optimal location for the fabric plant?

A)6.2, 3.0
B)6.0, 4.0
C)6.5, 5.3
D)5.6, 4.4
E)5.0, 3.0

Question 75

What is the composite score for location C?

A)76
B)75
C)78
D)74
E)76.33

Question 76

At what annual output would the company be indifferent between the two locations?

A)60,000 units
B)15,000 units
C)10,000 units
D)20,000 units
E)4,000 units

Question 77

What is the composite score for location B?

A)76
B)75
C)78
D)74
E)76.33

Question 78

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10.What would its total cost be at a monthly volume of 550 units?

A)$105,200
B)$102,500
C)$100,250
D)$100,520
E)$105,500

Question 79

What is the composite score for location A?

A)76
B)75
C)78
D)74
E)76.33

Question 80

What would be the total annual costs at the point of indifference?

A)$300,000
B)$240,000
C)$380,000
D)$220,000
E)$760,000