Deck 12: Location Planning and Analysis

Question 1

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

Answer 1

True

Question 2

New or small organizations often adopt an informal approach to location decisions.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

The factor rating method of location planning uses a coordinate overlay to determine relative locations.

Question 5

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.

Question 6

Factor rating is limited to quantitative information concerning location decisions.

Question 7

Taxes are an example of a regional/country-related factor in location decisions.

Question 8

Locating near customers is a primary factor for web-based businesses.

Question 9

Relative to manufacturing firms,location decisions for service businesses tend to be focused on revenue potential rather than being cost focused.

Question 10

In site selection,land costs may be secondary to other factors.

Question 11

Large national and international retailers such as Walmart,Sears,and Future Shop typically avoid locating in the same area as their competitors when opening a new store in a particular city.

Question 12

One of the factors affecting location decisions is the company's position in the supply chain.

Question 13

The first step in the location decision process is to determine a short list of approximately 3 or 4 potential sites.

Question 14

For service organizations,the dominant factor in location analysis is usually market-related.

Question 15

Since they can almost always be secured,government subsidies is not a significant factor in location decisions.

Question 16

Location decisions are basically one-time decisions that only pertain to newly formed organizations.

Question 17

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

Question 18

For agricultural companies,locating close to raw materials is typically a necessity.

Question 19

For manufacturing firms,two dominating factors in location analysis are abundance of energy and proximity to raw materials.

Question 20

Corruption in foreign locations can generally be viewed as an advantage in attracting companies to Canada.

Question 21

The Centre of Gravity Method is a computer-based tool for collecting,storing,retrieving,and displaying location-dependent demographic data on maps.

Question 22

Which statement is not associated with the basic steps in the location decision process?

A)Eliminate some sites to develop a short list of three or four sites.
B)Identify important search parameters and factors.
C)Maximize the number of sites considered.
D)Visit short-listed sites.
E)Gather information on appropriate sites.

Question 23

Which of the following is not considered a reason for foreign firms to locate in Canada?

A)Decreased delivery time to Canadian customers
B)Access to Canadian natural resources
C)Canadian workers are well educated
D)Political stability
E)Lack of government involvement in location decisions

Question 24

Which of the following is not a basic step in the location decision process?

A)Identify important search parameters and factors
B)Gather information on appropriate sites
C)Visit short-listed sites
D)Evaluate the alternatives and make a selection
E)Evaluate access to available technology.

Question 25

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

A)break-even analysis.
B)transportation method.
C)factor rating analysis.
D)linear regression.
E)a Voronoi polygon.

Question 26

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

A)regional factors.
B)community factors.
C)site-related factors.
D)the basis of negotiating government subsidies.

Question 27

Which of the following are Community/Site-Related Considerations in location decisions?

A)Location of raw materials.
B)Labour laws.
C)Room for expansion
D)location of markets
E)Labour productivity

Question 28

The method for evaluating location alternatives based on comparing composite (weighted-average)scores of both quantitative and qualitative criteria is:

A)break-even analysis.
B)transportation method.
C)factor rating analysis.
D)linear regression.
E)a Voronoi polygon.

Question 29

A trend in location strategies is the possibility that the future will see larger factories located in central locations.

Question 30

Which of the following is not categorized as a community/site-related consideration in location planning?

A)Labour laws
B)Recreation facilities
C)Education facilities
D)Transportation systems
E)Medical facilities

Question 31

An approach to locational analysis that includes both qualitative and quantitative considerations is:

A)break-even analysis.
B)factor rating.
C)transportation method.
D)expected value.
E)a Voronoi polygon.

Question 32

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

Question 33

Which of the following is not an accurate statement concerning location decisions?

A)Location decisions are influenced by the availability of labour.
B)The starting point for location decision process is developing a list of potential locations.
C)Location decisions generally involve long-term commitments.
D)Visiting a number of potential sites is typically part of the location decision process.
E)An organization's position in the supply chain influences location decisions.

Question 34

Which of the following is least likely to be a country (national)factor in location decisions?

A)Location of raw materials
B)Markets
C)Government subsidies
D)Zoning/regulations
E)Labour factors

Question 35

The centre of gravity method of location planning can only be used when the quantities to be shipped to each location are equal.

Question 36

Location decisions are a highly important part of production system design because: I.typically they are made rather frequently
II)they impact operating costs
III)they entail a high-cost,short-term commitment

A)typically,they are made rather frequently
B)they impact operating costs
C)they entail a high-cost,short-term commitment
D)mistakes can be easily overcome
E)they are usually based on one single factor

Question 37

Which of the following statements concerning location analysis best typifies the situation for most location decisions?

A)Regional and country level factors are more important than local community factors.
B)Local community factors are more important than regional and country level factors.
C)Availability of raw materials tends to be the dominant factor.
D)Labour costs tend to emerge as the dominant factor.
E)One or more factors stated dominate the decision.

Question 38

A factor that has caused problems for Canadian companies operating in foreign countries is:

A)tax laws.
B)raw materials.
C)corruption.
D)labour cost.
E)lack of markets.

Question 39

In location planning,land and building costs are considered:

A)regional factors.
B)community/site-related factors.
C)raw material considerations.
D)regional/country factors.
E)community

Question 40

Companies locate near or at the source of their raw materials for three primary reasons: necessity,perishability,and transportation costs.

Question 41

Phi Upsilon Nu,a student social organization,has two different locations under consideration for constructing a new chapter house.PhUN's president,a POM student,estimates that due to differing land costs,utility rates,etc.,both fixed and variable costs would be different for each of the proposed sites,as follows: What would be total annual costs for the Alpha Ave.location with 20 persons living there?

A)$4,000
B)$10,000
C)$16,000
D)$20,000
E)$26,000

Question 42

A clothing manufacturer produces clothing in five locations in the U.S.In a move to vertical integration,the company is planning a new fabric production plant which will supply fabric to all five clothing plants.The clothing plants have been located on a coordinate system as follows: 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 43

A location analysis has been narrowed down to three locations.The critical factors,their weights,and the ratings for each location are shown below: What is the composite score for location B?

A)69
B)72
C)75
D)79
E)82

Question 44

Phi Upsilon Nu,a student social organization,has two different locations under consideration for constructing a new chapter house.PhUN's president,a POM student,estimates that due to differing land costs,utility rates,etc.,both fixed and variable costs would be different for each of the proposed sites,as follows: How many people would be living in the new chapter house at the point of indifference?

A)20
B)30
C)40
D)50
E)60

Question 45

A location analysis has been narrowed down to three locations.The critical factors,their weights,and the ratings for each location are shown below: What is the composite score for location C?

A)69
B)72
C)75
D)79
E)82

Question 46

A location analysis has been narrowed down to three locations.The critical factors,their weights,and the ratings for each location are shown below: What is the composite score for location A?

A)69
B)72
C)75
D)79
E)82

Question 47

What is the computer-based tool used or collecting,storing,retrieving,and displaying location-dependent demographic data on maps?

A)Centre of Gravity method
B)Break-Even
C)Geographic information system
D)Factor Rating
E)Location Analysis software

Question 48

A hardware distributor has regional warehouses at the locations shown below.The company wants to locate a new central distribution centre to serve this warehouse network. 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 centre?

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 49

A clothing manufacturer produces clothing in five locations in the U.S.In a move to vertical integration,the company is planning a new fabric production plant which will supply fabric to all five clothing plants.The clothing plants have been located on a coordinate system as follows: If the shipments of fabric to each plant are 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 50

A manufacturing firm is considering two locations for a plant to produce a new product.The two locations have fixed and variable costs as follows: 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

Question 51

A hardware distributor has regional warehouses at the locations shown below.The company wants to locate a new central distribution centre to serve this warehouse network. If weekly shipments to each warehouse will be approximately equal,what is the optimal location for the distribution centre?

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

Question 52

A manufacturing firm is considering two locations for a plant to produce a new product.The two locations have fixed and variable costs as follows: 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 53

What is the primary reason a retailer would want to gather data utilizing GIS information?

A)To plan delivery routes and schedules
B)To attract advertisers
C)To map out local businesses
D)To link customers with location
E)To balance supply and demand

Question 54

Phi Upsilon Nu,a student social organization,has two different locations under consideration for constructing a new chapter house.PhUN's president,a POM student,estimates that due to differing land costs,utility rates,etc.,both fixed and variable costs would be different for each of the proposed sites,as follows: If it is estimated that thirty persons will be living in this new chapter house,which location should PhUN select?

A)Alpha Ave.
B)Beta Blvd.
C)Either Alpha Ave.or Beta Blvd.
D)Neither Alpha Ave.nor Beta Blvd.

Question 55

A manufacturing firm is considering two locations for a plant to produce a new product.The two locations have fixed and variable costs as follows: 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)Neither Atlanta nor Phoenix.

Question 56

A manufacturing firm is considering two locations for a plant to produce a new product.The two locations have fixed and variable costs as follows: If the annual demand is 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 57

A manufacturing firm is considering two locations for a plant to produce a new product.The two locations have fixed and variable costs as follows: 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 58

The method for determining location alternatives which minimizes distribution costs is:

A)break-even analysis.
B)transportation method.
C)factor rating analysis.
D)linear regression.
E)centre of gravity method.

Question 59

Which of the following is not a Regional/Country labour factor in location decisions?

A)Availability of workers
B)Wage rates
C)Labour productivity
D)Attitudes toward work
E)Local infrastructure

Question 60

Phi Upsilon Nu,a student social organization,has two different locations under consideration for constructing a new chapter house.PhUN's president,a POM student,estimates that due to differing land costs,utility rates,etc.,both fixed and variable costs would be different for each of the proposed sites,as follows: What would be total annual costs for either location at the point of indifference?

A)$26,000
B)$28,000
C)$30,000
D)$32,000
E)$34,000

Question 61

11eab92b_c492_aadb_99e6_fde94ba4ccd3 For what quantity would you be indifferent between selecting site A or site B?

Question 62

11eab92b_c492_d1ef_99e6_63799738534a For what range of output would you prefer site C?

Question 63

11eab92b_c492_aadd_99e6_b15f07816b55 For what range of output would you prefer site A?

Question 64

Determine the centre of gravity location for the destinations and shipping quantities shown below:
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Question 65

11eab92b_c492_d1f0_99e6_c1fe1de23baf Which site would you prefer for a quantity of 20,000 units per year?

Question 66

11eab92b_c492_aadc_99e6_4d61b6eafb2f For what quantity would you be indifferent between selecting site B or site C?

Question 67

11eab92b_c492_d1ee_99e6_394ef4a8637e For what range of output would you prefer site B?

Question 68

A manager must decide between two location alternatives,Montreal and Toronto.Montreal would have annual fixed costs of $80,000,transportation costs of $80 per unit,and labour and material costs of $70 per unit.Toronto would have annual fixed costs of $150,000,transportation costs of $20 per unit,and labour and material costs of $80 per unit.Revenue will be $250 per unit.
(i)Which alternative would yield the higher profit for an annual demand of 2,000 units?
(ii)At what volume (quantity)would the manager be indifferent in terms of which of the two locations were chosen? What would the profit be at that volume?
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Question 69

A firm is trying to decide between two location alternatives,A and
B.A would result in annual fixed costs of $60,000,labour costs of $7 per unit,material costs of $10 per unit,transportation costs of $15 per unit,and revenue per unit of $50.Location B would have annual fixed costs of $80,000,labour costs of $6 per unit,material costs of $9 per unit,transportation costs of $14 per unit,and revenue per unit of $48.
(i)At an annual volume of 9,000,which would yield the higher profit?
(ii)At what annual volume would management be indifferent between the two alternatives in terms of annual profits?
(i)Profits @ 9,000 units a year: A = $102,000; B = $91,000
(ii)$18Q - $60,000 = $19Q - $80,000.Solving,Q = 20,000 units.