Question 1

The local government's willingness to invest in upgrading infrastructure to the levels required by a company is an important issue in a company's decision of where to locate a new facility.

Accepted Answer

This statement is true. A company needs infrastructure such as roads, utilities, and transportation systems in order to operate efficiently, and the local government's investment in upgrading these infrastructure can be a key factor in the company's decision of where to locate a new facility.

Question 2

Issues of product mix and capacity are strongly interconnected to the facility location decision.

Accepted Answer

The product mix and capacity of a facility are important factors to consider when deciding on a location for the facility. The location decision should be made based on the ability to effectively produce the desired product mix and meet capacity requirements. A location that does not have the appropriate infrastructure or resources to support the desired product mix or capacity could result in inefficient operations and decreased profitability.

Question 3

A free trade zone operates under different rules and laws than a foreign trade zone.

Accepted Answer

Both terms often refer to the same concept, where a designated area within a country operates under different customs and tax regulations than the rest of the country to encourage trade and investment. The terminology can vary by country, but the fundamental purpose and function are typically similar.

Question 4

Because the world is becoming more highly interconnected, the proximity of an important supplier's plants is not crucial in supporting lean production methods.

Accepted Answer

The world becoming more highly interconnected does allow for easier communication and transportation, but the proximity of important supplier's plants is still crucial in supporting lean production methods. This is because having suppliers located nearby can reduce transportation costs and lead times, allowing for quicker responses to changes in demand or supply disruptions.

Question 5

In facility location decision making, the factor-rating system is one of the least used general location techniques.

Accepted Answer

The factor-rating system is actually one of the most commonly used general location techniques in facility location decision making. It involves identifying and evaluating key factors such as labor availability, transportation access, and utility costs, and assigning weights and scores to each factor to compare potential locations.

Question 6

The objective of facility location analysis is to select the site with the lowest total cost.

Accepted Answer

The objective of facility location analysis is indeed to select the site with the lowest total cost, taking into account factors such as transportation costs, labor costs, and facility construction costs.

Question 7

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of low wage costs and/or skill levels.

Accepted Answer

Facility location analysis takes into account the need to locate near a suitable labor pool that offers low wages or suitable skills to gain a competitive advantage.

Question 8

Quality of life in a host community is not a major factor in making the facility location decision.

Accepted Answer

The quality of life in a host community is actually a significant factor in making the facility location decision. Companies consider factors such as the availability of affordable housing, access to healthcare and education, recreational opportunities, and overall community well-being when choosing a location for their facilities. A community with a high quality of life can also enhance the attractiveness of the location for potential employees, making it easier for companies to recruit and retain top talent.

Question 9

A favorable business climate in facility location decision making might include local government providing basic skill training for prospective members of the workforce.

Accepted Answer

Having access to a well-trained workforce is important for businesses looking to locate in a particular area. Local government providing basic skill training can help build a pool of qualified workers, making the area more attractive to businesses.

Question 10

An example of a positive business climate that might influence a facility location decision is increasing governmental costs and increasing property taxes.

Accepted Answer

Increasing governmental costs and property taxes would create a negative business climate, making it less likely for a company to choose that location for a facility. A positive business climate might include incentives for businesses, low tax rates, good infrastructure, and a skilled workforce.

Question 11

Governmental barriers to enter and locate in many countries are increasing through restrictive protectionist legislation.

Accepted Answer

The answer of Governmental barriers to enter and locate in...

Question 12

Facility location analysis considers the competitive imperative of a favorable business climate as indicated by the presence of other companies in the same industry.

Accepted Answer

Facility location analysis does consider the competitive imperative of a favorable business climate, which may be indicated by the presence of other companies in the same industry. This helps to ensure that the location selected is strategically advantageous for the business.

Question 13

A free trade zone is typically a closed facility into which foreign goods can be brought without being subject to the usual customs requirements.

Accepted Answer

A free trade zone is a designated area where goods can be imported and exported without being subject to certain tariffs or customs regulations.

Question 14

Facility location analysis considers the competitive imperative of lowest total cost.

Accepted Answer

Facility location analysis aims to find a location that minimizes the total cost of production, transportation, and distribution. This competitive imperative is driven by the need to remain profitable and competitive in the market. Therefore, the statement is true.

Question 15

A favorable business climate in facility location decision making might include government legislation of tax abatements.

Accepted Answer

Tax abatements, incentives, and other forms of government support can make a location more attractive to businesses. These types of policies are often used to create a favorable business climate and promote economic development.

Question 16

In facility location decision making the educational and skill levels of the labor pool must match the company's needs.

Accepted Answer

This is true since the labor pool's educational and skill levels will impact the company's ability to operate effectively and efficiently. Choosing a location with a labor pool that matches the company's needs can lead to improved productivity and performance.

Question 17

A favorable business climate in facility location decision making might include local government intervention to facilitate businesses locating in an area via subsidies.

Accepted Answer

Local government intervention in the form of subsidies or other incentives can create a more favorable business climate by reducing the costs of locating facilities in a certain area.

Question 18

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of high technical skills.

Accepted Answer

Facility location analysis takes into consideration various factors including labor availability, cost, quality, and skills. Locating near the appropriate labor pool ensures that the facility can easily access high technical skills to support business operations, improve productivity and competitiveness.

Question 19

Facility location analysis considers the competitive imperative to be close to customers as to timeliness of deliveries.

Accepted Answer

Facility location analysis takes into account the importance of being close to customers for timely deliveries, which is a competitive necessity.

Question 20

In facility location decision making matching the educational and skill levels of the labor pool to a company's needs is even more important than the labor pool's willingness and ability to learn.

Accepted Answer

While matching the educational and skill levels of the labor pool to a company's needs is important, the labor pool's willingness and ability to learn can be equally or more important, as it allows for adaptability and growth in a rapidly changing business environment.

Quiz 14: Location, Logistics, and Distribution