Deck 9: Distribution Center, Warehouse, and Plant Location

Question 1

What two countries account for approximately one-third of the world's population?
a. China and Indonesia
b. India and the United States
c. China and India
d. the United States and China

Answer 1

China and India

Question 2

Turnover rates for expatriate workers current run between ____ percent.
a. 10 and 20
b. 15 and 25
c. 20 and 40
d. 25 and 45

Answer 2

20 and 40

Question 3

A locavore strategy ____.
a. is based on the agglomeration concept
b. refers to purchasing locally grown or produced foods
c. focuses on hiring local workers
d. is associated with reducing inventory turnover
e. none of the above

Answer 3

refers to purchasing locally grown or produced foods

Question 4

Right-to-work laws refer to a situation where ____.
a. worker strikes are illegal
b. every person who wants a job is guaranteed a job
c. each state provides employment to those people receiving public assistance
d. an individual cannot be compelled to join a union as a condition of employment

Question 5

The processing point for a pure material ____.
a. should be near its source
b. should be near the final market
c. can be anywhere in the world
d. can be anywhere near the source and the market

Question 6

The processing point for a weight-gaining raw material ____.
a. can be anywhere near the source and the market
b. should be near its source
c. should be near the final market
d. should be equidistant between the source and the market

Question 7

All of the following are true except ____.
a. countries with low labor costs often have a multitude of sweatshops
b. there has been a decrease in maquiladoras in recent years
c. a workforce's union status may be a key locational determinant for some organizations
d. expatriate work assignments can be costly
e. all of the above are true

Question 8

In 2010, the three most populous U.S. states were located in the West, Southwest, and ____.
a. Northeast
b. Southeast
c. Midwest
d. Southwest

Question 9

The initial focus in facility location is on a ____.
a. city
b. county
c. state or province
d. region

Question 10

A pure material ____.
a. is one that loses no weight in manufacturing
b. cannot be mixed with other materials
c. is soluble in water
d. comes from the ocean
e. none of the above

Question 11

The processing point for a weight-losing raw material ____.
a. can be anywhere near the source and the market
b. should be near its source
c. should be near the final market
d. should be equidistant between the source and the market

Question 12

Which of the following statements is false?
a. the initial focus in facility location is on a region
b. because manufacturing plants and warehousing can be very expensive to lease or build, companies are hesitant to close them
c. poorly located facilities do not impact logistical effectiveness
d. poorly located facilities negatively impact logistical efficiency
e. all of the above are true

Question 13

The general trend in recent years has been for companies to do what with their distribution networks?
a. maintain the status quo
b. relocate their facilities
c. slightly increase the number of facilities
d. reduce the number of facilities

Question 14

____ plants, which are located just south of the U.S.-Mexican border, provide much needed jobs to Mexican workers and allow for low-cost, duty-free production so long as all goods are exported from Mexico.
a. industry cluster
b. locavore
c. maquiladora
d. free trade zone

Question 15

____ is the most popular location for near-sourcing among companies that do business in North America.
a. Canada
b. Mexico
c. Puerto Rico
d. Brazil
e. none of the above

Question 16

An expatriate refers to a person who ____.
a. is sent to work in other countries for extended periods of time
b. holds dual citizenship
c. has been stripped of citizenship
d. is ineligible to work outside his (her) home country

Question 17

Which of the following is not a key shortcoming of the sweatshops associated with the electronics industry?
a. violations of working hours
b. poor workplace ventilation
c. violations of wage agreements
d. discriminatory practices based on age
e. all of the above are key shortcomings

Question 18

Which of the following is false?
a. pure materials lose no weight in processing
b. with weight-gaining products the processing point should be close to the market
c. water is a requirement for the location of many facilities
d. a 250,000 square foot distribution center might require at least 50 acres of land for construction purposes
e. all of the above are true

Question 19

Labor force ____ are a key locational determinant as supply chains become more global in nature.
a. wage rates
b. size
c. skills
d. age

Question 20

Over the past quarter century, discussion of natural resources and facility location has increasingly factored in ____ considerations.
a. cost
b. supply chain
c. diversity
d. environmental

Question 21

A brownfield is ____.
a. a term for where crushed boxes are stored before recycling
b. a term that refers to a potential site that has no trees needing to be cleared before construction
c. a property for which use and redevelopment is complicated by past use
d. an airport that lacks paved runways
e. none of the above

Question 22

With respect to commodity flows, logisticians are especially interested in ____ and ____.
a. what is being produced; where it is being shipped
b. how much is being produced; where it is being produced
c. how much is being produced; where it is being shipped
d. what is being produced; where it is being produced

Question 23

Facility location is a logistics/supply chain activity that has evolved from a tactical decision to one of tremendous strategic importance in numerous organizations.

Question 24

The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers give ____ days' notice about plant closings and mass layoffs.
a. 30
b. 60
c. 90
d. 120
e. none of the above

Question 25

China and India account for approximately one-third of the world's population.

Question 26

Poorly located facilities, such as manufacturing plants and warehouses, negatively impact logistical effectiveness, but have little impact on logistical efficiency.

Question 27

A free trade zone refers to an area ____.
a. that is home to businesses that are owned and operated by large concentrations of a particular ethnic group
b. in which products can be stored, exhibited, or processed without being subjected to duties and quotas unless they enter the customs territory of the zone country
c. in which the federal government disregards all import and export quotas for products coming from, or destined to, "favored" nations
d. an area outside the legal jurisdiction of federal, state, and/or local governments
e. none of the above

Question 28

The European Union's expansion into Central and Eastern European countries has resulted in the Czech Republic and ____ becoming favored distribution sites because of their relatively central location.
a. Poland
b. Hungary
c. Switzerland
d. Austria

Question 29

Which of following is not a possible quality of life consideration in facility location?
a. cost of living
b. crime rate
c. educational opportunities
d. the weather
e. all of the above are quality of life considerations

Question 30

Which of the following is not a possible reason for a facility closing?
a. eliminating redundant capacity in mergers and acquisitions
b. poor planning
c. improving supply chain efficiency
d. insufficient volume of business
e. all of the above are possible reasons

Question 31

How does the weighted center-of-gravity approach to location analysis differ from the center-of-gravity approach to location analysis?
a. the weighted approach considers real estate taxes
b. the weighted approach is less complicated
c. the weighted approach considers shipment volume
d. the weighted approach considers tapering rates

Question 32

From a business perspective, ____ taxes are analogous to the personal property taxes paid by individuals.
a. sales
b. real estate
c. inventory
d. corporate franchising

Question 33

A general rule of thumb is that the services received represent only about ____ percent of the taxes paid.
a. 60
b. 50
c. 40
d. 30

Question 34

Which of the following statements is false?
a. the accessibility of highway transportation often ranks as one of the most important criteria in facility location
b. transportation considerations are a key aspect of facility location decisions
c. a poor facility location can increase transportation costs as well as negatively impact customer service
d. a centralized facility location can maximize a facility's service area
e. all of the above are true

Question 35

The initial focus in facility location is on a region of the world.

Question 36

The five most populous states in the United States were the same in 1980 and 2010.

Question 37

Supplier parks are a concept that developed around ____ and their suppliers in Europe.
a. supermarkets
b. apparel makers
c. computer makers
d. automakers

Question 38

The existence of transportation competition, whether intermodal or intramodal, tends to ____.
a. have both cost and service benefits to a user
b. have cost, but not service, benefits to a user
c. have both cost and service benefits to a user
d. have neither cost nor service benefits to a user

Question 39

The center-of-gravity approach to location analysis minimizes ____.
a. labor costs
b. warehousing costs
c. real estate taxes
d. distance to existing facilities

Question 40

____ refers to the net advantages that can be gained by a sharing of common locations by various enterprises.
a. supplier development
b. coopetition
c. supplier relationship management
d. agglomeration

Question 41

Population can be viewed as both a market for goods and a potential source of labor.

Question 42

An expatriate is a person who is not allowed to work outside his (her) home country.

Question 43

Inventory taxes have become increasingly difficult to collect in part because of a lack of agreement as to what is meant by inventory.

Question 44

Centralized facilities tend to minimize total transit distances, which likely results in minimum transportation costs.

Question 45

A poor facility location can increase transportation costs, but has minimal impact on customer service.

Question 46

Right-to-work laws mean that every person who wants a job is guaranteed a job.

Question 47

Maquiladora plants have experienced a resurgence in recent years because of a focus on manufactured products that depend on fast time to market.

Question 48

The processing point for a weight-gaining raw material should be close to the market.

Question 49

Over the past quarter century, discussion of natural resources and facility location has increasingly factored in environmental and sustainability considerations.

Question 50

Intermodal competition refers to the number of carriers within a particular mode of transportation.

Question 51

A locavore strategy focuses on hiring local workers.

Question 52

Sweatshops are organizations that exploit workers and that do not comply with fiscal and legal obligations towards employees.

Question 53

A pure material is one that is totally water soluble.

Question 54

The United States has the highest hourly compensation rates in the world.

Question 55

The processing point for a weight-losing raw material can be anywhere between the source and the market.

Question 56

Labor wage rates appear to be a key locational determinant as supply chains become more global in nature.

Question 57

Population size is an irrelevant consideration in the facility location decision.

Question 58

A general rule of thumb is that the services received from business taxes represent only about 50% of the taxes that were paid.

Question 59

An early step in the facility location decision should involve determining the total number of facilities that a firm should operate.

Question 60

Turnover rates for expatriate workers currently range between 20% and 40%.

Question 61

A community can encourage or discourage business activity through changes in the zoning classifications of land.

Question 62

Suppose that AAA decides to near-source production to Latin America. Keeping in mind the key stipulation presented in the case, where might AAA locate its production plant in Latin America? Why?

Question 63

Free trade zones must be adjacent to a port or an airport.

Question 64

Brownfields refer to a place where flattened cartons are stored until they are recycled.

Question 65

Quality of life considerations play a limited role in facility location decisions.

Question 66

The idea behind a weighted center-of-gravity approach is that a prospective warehousing facility will be located closer to the existing sites with the greatest current demand.

Question 67

The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers give 90 days' notice about plant closings and mass layoffs.

Question 68

The development and implementation of multicountry trade agreements has had profound impacts on trade patterns.

Question 69

Agglomeration refers to the net advantages that can be gained by a sharing of common locations by various enterprises.

Question 70

Grid systems are important to locational analysis because they allow one to analyze spatial relationships with relatively simple mathematical tools.

Question 71

With respect to commodity flows, logisticians are especially interested in what is being produced and where it is being produced.

Question 72

With respect to transportation considerations, is Patna or Lucknow the preferred location? Why?

Question 73

Facility relocation is associated with business growth, while facility closing is associated with business contraction.

Question 74

Government considerations such as the relevant legal system, political stability, and protectionism are important when companies are thinking of facility location in non-domestic countries.

Question 75

With respect to the natural resources needed to make wickable shirts, is Patna or Lucknow the preferred location? Why?

Question 76

With respect to quality-of-life considerations, is Patna or Lucknow the preferred location? Why?

Question 77

The European Union's expansion into Central and Eastern European countries has seen Hungary become a favored distribution site because of its relatively central geographic location.

Question 78

Supplier parks refer to places where main component makers locate in specially created industrial complexes adjacent to assembly plants.

Question 79

With respect to labor characteristics, is Patna or Lucknow the preferred location? Why?