Question 1

Retail businesses often engage in ____________, the tendency to locate in close proximity to one another.

Accepted Answer

Retail businesses often engage in clustering, the tendency to locate in close proximity to one another. This is because it creates a concentration of retailers in a particular area, which can attract more customers due to the convenience of having many options in one location. Additionally, clustering can result in lower operating costs for retailers as they can share resources and benefit from the foot traffic generated by other businesses in the area.

Question 2

The center of gravity method is used to _______ travel time or shipping costs.

Accepted Answer

The center of gravity method is used to minimize travel time or shipping costs by finding the optimal location for a facility based on the location of demand points and their corresponding weights.

Question 3

Locational cost-profit-volume analysis assumes:
I. nonlinear variable costs.
II.fixed costs that are constant over the range of possible output.
III.accurate estimates regarding the required level of output.
IV.multiple products.

Accepted Answer

Locational cost-profit-volume analysis assumes fixed costs that are constant over the range of possible output and requires accurate estimates regarding the required level of output. It does not require nonlinear variable costs or multiple products. Therefore, option B is the correct answer.

Question 4

Which statement best characterizes the objective ofa typical search for location alternatives?

Accepted Answer

The answer of Which statement best characterizes the objective ofa...

Question 5

An approach to location analysis that can include both qualitative and quantitative considerations is:

Accepted Answer

The factor rating approach allows for a combination of qualitative and quantitative criteria to be considered. Factors such as availability of labor, transportation, and community attitudes can be included alongside numerical measures such as transportation costs and tax rates. This approach can provide a more holistic analysis of location options.

Question 6

Location options do not usually include:

Accepted Answer

The given location options all involve some form of change or action, either expanding or contracting, adding new facilities, or moving. Option E, "doing nothing," is also a possible location option but is not listed as one of the answer choices. Option B, "a contract," does not make sense in the context of location options and is therefore not a valid choice.

Question 7

Some communities offer financial and other incentives to ______ new businesses.

Accepted Answer

The word "incentives" suggests that the blank must be filled with a word meaning to encourage or entice. The only option that fits this definition is "attract." Thus, the correct answer is B) attract.

Question 8

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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: $$\begin{array} { l c c } 
\text { Location } & \text { Annual Fixed } & \text { Variable } \
\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { perperson } \
\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { per person }
\end{array}$$
What would be the total annual costs for the Alpha Ave. location with 20 persons living there?

Accepted Answer

The total annual cost for Alpha Ave. is calculated by adding the fixed cost to the product of the variable cost per person and the number of persons: $5,000 + ($200 * 20) = $9,000.

Question 9

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

Accepted Answer

Regional factors include the location of raw materials, markets, and labor considerations, as these elements often influence the broader regional choice for a facility's location before narrowing down to specific communities or sites.

Question 10

Cultural differences, customer preferences, labor, and resources are factors relating to:

Accepted Answer

The answer of Cultural differences, customer preferences, labor, and resources...

Question 11

When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is:

Accepted Answer

The technique that uses both quantitative and qualitative inputs for location evaluation is factor rating. Linear programming, transportation models, and center of gravity methods only use quantitative inputs, while consumer surveys primarily use qualitative inputs. Therefore, the best choice is C.

Question 12

Which of the following is the last step in the procedure for making location decisions?

Accepted Answer

The last step in the procedure for making location decisions is to evaluate alternatives and make a selection. This step involves analyzing the pros and cons of each location alternative and selecting the one that best meets the evaluation criteria and factors identified earlier.

Question 13

The method for evaluating location alternatives that uses their total-cost lines is:

Accepted Answer

The method described in the question (using total-cost lines) is specifically known as locational cost-profit-volume analysis. Therefore, the correct answer is A. The transportation model, factor rating, GIS analysis, and the center-of-gravity method are all valid methods for evaluating location alternatives, but they do not specifically use total-cost lines as part of their methodology.

Question 14

Which of the following is a location option that management can consider in location planning?
I.	Expand an existing facility.
II.	Add a new location.
III.	Relocate from one location to another.
IV.	Do nothing.

Accepted Answer

All the options listed (expanding an existing facility, adding a new location, relocating, and doing nothing) are valid strategies that management can consider in location planning.

Question 15

The method for evaluating location alternatives that incorporates both qualitative and quantitative inputs to establish a composite score for each alternative is:

Accepted Answer

The factor rating method is the most appropriate method among the given options as it considers both qualitative and quantitative factors and creates a composite score for each alternative. The other methods are either specific to cost analysis (cost-profit-volume analysis), transportation routing (the transportation model), location of a facility based on customer location (center-of-gravity method) or based on geographic data (GIS analysis). None of these methods incorporates both qualitative and quantitative factors to the extent that the factor rating method does.

Question 16

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

Accepted Answer

The transportation model is specifically designed to evaluate location alternatives based on minimizing shipping costs between multiple sending and receiving locations. It is a mathematical model that considers the supply and demand of goods, transportation costs, and shipping capacities to determine the optimal allocation of goods and routes.

Question 17

Nearness to raw materials would be most important to a:

Accepted Answer

Nearness to raw materials would be most important to a manufacturing company. This is because manufacturing companies rely on raw materials for production and having easy access to these materials helps reduce costs and improve efficiency. Grocery stores, tax preparation services, post offices, and hospitals do not have as great a need for proximity to raw materials in order to operate.

Question 18

Among the potential disadvantages of having global operations is/are:

Accepted Answer

Having global operations can lead to low labor productivity due to factors such as cultural differences, language barriers, and varying levels of skill or education among workers in different countries.

Question 19

Software systems known as GIS help in location analysis. The initials GIS stand for:

Accepted Answer

GIS stands for Geographic Information System.

Question 20

A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:

Accepted Answer

The answer of A location analysis has been narrowed down...

Quiz 11: Location Planning and Analysis