A major problem in a plant location decision based on the factor-rating system is that simple point-rating schemes do not account for the wide variance of costs that may occur within each factor used in the analysis.

Question

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The statement is true, as simple point-rating schemes do not take into consideration the wide variance of costs that may occur within each factor used in the analysis, which can lead to incorrect plant location decisions.

A Major Problem in a Plant Location Decision Based on the Factor-Rating