Exam 8: Location Strategies

Industrial firms choose locations that minimize cost, but service firms look for locations with good demographics and traffic count because these variables are indicators of good __________.

Labor cost per unit is also referred to as __________.

Location decisions are based on many things, including costs, revenues, incentives, attitudes, and intangibles, but not on ethical considerations.

When innovation replaces cost as a firm's focus for location decisions, the presence of other state-of-the-art firms is a plus, not a negative, for the firm's competitiveness.

Starbucks Coffee's use of geocoded demographic and consumer data in site selection decisions is an example of the use of a Geographic Information System, or GIS.

"Proximity" or closeness implies that a firm should locate "close" to something. What are the three kinds of proximity described in the text? What are the basic conditions under which each is appropriate? What kinds of firms are likely to use each of these?

Consider the list of Key Success Factors in your textbook. From items on that list, select two which might involve ethical issues or issues of social responsibility, and cite a possible example of each. Write a brief explanation of each of your examples. Cite and describe a third example, from an area not covered by the KSFs.

A small producer of music boxes wants to move to a larger facility. Two alternative facilities have been found. Site 1 has a fixed cost of $500,000 per year, with a variable cost of $25 per unit. Site 2 has a fixed cost of $800,000 per year, but a variable cost of $22 per unit. a. Write out the equation for total cost for each site. b. At what volume of output would the two locations have the same total cost? c. For what range of output would Site 1 be superior? d. For what range of output would Site 2 be superior?

Geographic Information Systems can assist the location decision by

Traffic counts and demographic analysis of drawing areas are associated with

The location decisions of goods-producing firms will generally pay more attention to parking, access, and traffic counts than will service location decisions.

A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a location decision.

A grocery chain is deciding on where to locate its new distribution center. The new DC will serve four grocery stores, each with a demand of 10,000 units. If the coordinates of the stores are (112,108), (110,50), (40, 85), and (10, 25) where should the DC be located? Suppose now that each store instead had demand of 20,000 units. Where should the DC go in this case?

Evaluating location alternatives by comparing their composite (weighted-average) scores involves

What kinds of location decisions are appropriate for use of crossover analysis? Write a brief paragraph explaining how crossover analysis (break-even analysis) can assist an operations manager choose among alternative sites in making a location decision.

Location analysis techniques typically employed by service organizations include

Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries?

The reason fast food restaurants often are found in close proximity to each other is

Which of these factors would be considered when making a location decision at the region/community level?

Starbucks Coffee's approach to choosing new café locations is largely based on executive intuition, not sophisticated models and site selection technology.