Question 1

A favorable labor climate might include all of the following except:

Accepted Answer

A favorable labor climate typically includes a good work ethic, no union presence, and an educated workforce, but not necessarily high average wages, as employers often seek to minimize labor costs.

Question 2

An important factor for locating new manufacturing plants is:

Accepted Answer

D

Question 3

Critical mass is a situation whereby several competing firms cluster near one location, and thus attract more customers than the total number who would shop at the same stores in scattered locations.

Accepted Answer

Critical mass is a real phenomenon where competing firms cluster together in a particular location, which results in increased foot traffic, more customer purchases, and greater revenue for all businesses involved. This clustering effect is desirable primarily because it allows stores to reach a critical mass that makes them stand out from others operating in different locations. Thus, the statement is true.

Question 4

When comparing several sites, typically a company will pick specific available site locations, then broaden their choices to communities, and finally to alternate regions.

Accepted Answer

Typically, the process starts broad by selecting regions, then narrows down to communities within those regions, and finally to specific site locations within those communities.

Question 5

Quality of life issues include:

Accepted Answer

The other options listed may have an impact on a person's quality of life, but access to recreational facilities is a more direct factor that can contribute to overall happiness and well-being.

Question 6

Service location decisions are driven primarily by the operating costs at the locations under consideration.

Accepted Answer

While operating costs are an important factor, service location decisions are also significantly influenced by factors such as proximity to customers, labor availability, infrastructure, and quality of life, among others.

Question 7

Which of the following statements about locating facilities in the service sector is best?

Accepted Answer

The factors that apply to manufacturing firms, such as transportation, labor, and utility costs, are also important for service facilities. However, location can also have a significant impact on customer satisfaction and sales, which needs to be taken into account.

Option B is not entirely correct as locating near competitors can also offer benefits like shared customer base and supplier networks. Option C is specific to creating clusters of similar businesses, and option D is not entirely accurate as there may be other reasons like proximity to transportation hubs for warehousing and distribution operations.

Question 8

Many firms are concluding that large, centralized manufacturing facilities in low-cost countries with poorly trained workers are not sustainable.

Accepted Answer

Many firms are now realizing that having large, centralized manufacturing facilities in low-cost countries with poorly trained workers may initially result in cost savings, but it is not sustainable in the long run. Firms are now focusing on more decentralized, flexible manufacturing operations that allow for quick responses to changing customer demand and quality control. This shift in approach is driven by the realization that quality is just as important as cost when it comes to manufacturing.

Question 9

The center of gravity method considers a greater number of location factors than the break-even analysis.

Accepted Answer

The center of gravity method primarily focuses on minimizing transportation costs by considering locations based on the geographic location of facilities and demand points, whereas break-even analysis evaluates the cost implications of different locations, potentially considering a broader range of cost factors beyond just transportation.

Question 10

Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high impact on the company's ability to meet its goals and the factors themselves must be affected by the location decision.

Accepted Answer

The statement accurately describes the criteria for selecting factors to evaluate location decisions. The factors chosen must be critical to the company's success and affected by the location decision in order to be useful in the decision-making process.

Question 11

What are the dominant factors that a manufacturing firm must consider when making a location decision?

Accepted Answer

The answer of What are the dominant factors that a...

Question 12

More than 80 percent of all relocations are within 10 miles of the first location, so usually the existing workforce is displaced.

Accepted Answer

Most relocations do not necessarily occur within such a short distance, and the impact on the workforce varies widely depending on the nature of the relocation, the distance, and the specific circumstances of the move.

Question 13

Repeated onsite expansion ultimately leads to diseconomies of scale.

Accepted Answer

As a company expands repeatedly onsite, there may come a point where the costs of scaling outweigh the benefits, leading to inefficiencies and diseconomies of scale. This can happen due to increased overhead, communication difficulties, and other factors that make it harder to maintain efficiency as the company grows.

Question 14

Consider any two factors that a service operation assigns the greatest weight when making a location decision. Using those two factors, identify one local service operation that likely used one of those factors as their top priority and a different service operation that likely used the other of your two factors as their dominant criterion. Briefly describe the business and justify your assignment of each factor as the overriding concern.

Accepted Answer

The answer of Consider any two factors that a service...

Question 15

When outbound transportation costs are a dominant factor, manufacturing facilities should be located close to suppliers and resources needed for production.

Accepted Answer

When outbound transportation costs are dominant, manufacturing facilities should be located closer to the market or customers to minimize those costs, rather than close to suppliers or resources.

Question 16

If the customer must be physically present at the process, location is an important issue.

Accepted Answer

If the customer needs to be physically present during the process, then the location of the process is important to ensure accessibility and convenience for the customer.

Question 17

Which of the following location factors was not found to dominate location decisions for new U.S. manufacturing plants?

Accepted Answer

Proximity to competitors' facilities is not typically a dominating factor in the decision-making process for the location of new U.S. manufacturing plants. Factors such as proximity to the parent company's facilities, quality of life, and a favorable labor climate are more influential in these decisions.

Question 18

One dominant factor in locating manufacturing facilities is a favorable labor climate.

Accepted Answer

A favorable labor climate, such as low labor costs and pro-business policies, can significantly impact a company's decision to locate its manufacturing facilities in a particular location.

Question 19

Traffic flows are one dominant factor in locating manufacturing location.

Accepted Answer

The answer of Traffic flows are one dominant factor in...

Question 20

On average, it is less expensive to relocate a service-oriented business than a manufacturing business.

Accepted Answer

Service-oriented businesses typically have less physical equipment and inventory to transport, which can reduce the costs associated with relocation compared to manufacturing businesses that require large amounts of machinery, raw materials, and finished products to be moved.

Quiz 13: Supply Chain Logistic Networks