Question 1

An example of an intangible cost, as it relates to location decisions, is the quality of education.

Accepted Answer

A) True 
 B)False

Question 2

What describes a system that stores and displays information that can be linked to a geographic location?

Accepted Answer

A)  AIS 
B)  LOC 
C)  GLOC 
D)  LIS 
E)  GIS 
A)  AIS 
B)  LOC 
C)  GLOC 
D)  LIS 
E)  GIS

Question 3

In location planning, environmental regulations, cost and availability of utilities, and taxes are

Accepted Answer

A)  global factors 
B)  country factors 
C)  regional/community factors 
D)  site-related factors 
E)  none of the above 
A)  global factors 
B)  country factors 
C)  regional/community factors 
D)  site-related factors 
E)  none of the above

Question 4

The center-of-gravity method is used primarily to determine what type of locations?

Accepted Answer

A)  service locations 
B)  manufacturing locations 
C)  distribution center locations 
D)  supplier locations 
E)  call center locations 
A)  service locations 
B)  manufacturing locations 
C)  distribution center locations 
D)  supplier locations 
E)  call center locations

Question 5

Unfavorable exchange rates can offset other savings in a location decision.

Accepted Answer

A) True 
 B)False

Question 6

The center-of-gravity method does not take into consideration the

Accepted Answer

A)  location of markets 
B)  volume of goods shipped to the markets 
C)  value of the goods shipped 
D)  combination of volume and distance 
E)  center-of-gravity method considers none of the above 
A)  location of markets 
B)  volume of goods shipped to the markets 
C)  value of the goods shipped 
D)  combination of volume and distance 
E)  center-of-gravity method considers none of the above

Question 7

East Texas Seasonings is preparing to build one processing center to serve its four sources of seasonings. The four source locations are at coordinates shown below. Also, the volume from each source is provided.
a. Calculate the volume-weighted center of gravity.
b. Calculate the simple center of gravity (all cities weighted equally).
c. Explain why the two calculations differ.

Accepted Answer

The weighted center of gravity is locate

Question 8

Identify those factors identified in the textbook as creating legal or ethical issues for operations mangers as they analyze location decisions.

Accepted Answer

The text identifies bribery, corruption,

Question 9

What kinds of location decisions are appropriate for use of center-of-gravity analysis? What variable is being optimized in this analysis?

Accepted Answer

The center-of-gravity technique is appro

Question 10

A clothing chain is considering two different locations for a new retail outlet. They have identified the four factors listed in the following table as the basis for evaluation, and have assigned weights as shown on the left. The manager has rated each location on each factor, on a 100-point basis, as shown on the right.     What is the score for Chester?

Accepted Answer

A)  10.00 
B)  24.50 
C)  25.75 
D)  27.00 
E)  100.00 
A)  10.00 
B)  24.50 
C)  25.75 
D)  27.00 
E)  100.00

Question 11

A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost?

Accepted Answer

A)  Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. 
B)  Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. 
C)  Plant A, because it is cheaper than Plant B for all volumes. 
D)  Plant B, because it has the lower variable cost per unit. 
E)  Neither Plant A nor Plant B, because the crossover point is at 10 million units. 
A)  Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. 
B)  Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. 
C)  Plant A, because it is cheaper than Plant B for all volumes. 
D)  Plant B, because it has the lower variable cost per unit. 
E)  Neither Plant A nor Plant B, because the crossover point is at 10 million units.

Question 12

FedEx schedules its aircraft using a __________ system, which it credits with reducing package mishandling and delay in transit.

Accepted Answer

The answer of FedEx schedules its aircraft using a __________...

Question 13

Which of the following statements regarding the center-of-gravity method is false?

Accepted Answer

A)  It is designed to minimize the maximum possible travel distance to any location. 
B)  The optimal x- and y-coordinates are calculated separately. 
C)  The optimal solution is unconstrained, so it could suggest a location in the middle of a body of water. 
D)  The weights used are the quantity of goods moved to or from each location. 
E)  The origin of the coordinate system and the scale used are arbitrary, just as long as the relative distances are correctly represented. 
A)  It is designed to minimize the maximum possible travel distance to any location. 
B)  The optimal x- and y-coordinates are calculated separately. 
C)  The optimal solution is unconstrained, so it could suggest a location in the middle of a body of water. 
D)  The weights used are the quantity of goods moved to or from each location. 
E)  The origin of the coordinate system and the scale used are arbitrary, just as long as the relative distances are correctly represented.

Question 14

Which of the following was not a factor in determining the location of Intel's Arizona plant?

Accepted Answer

A)  skilled labor availability 
B)  U.S. laws to protect intellectual property 
C)  tax breaks from local and regional government 
D)  proximity to Intel's California headquarters 
E)  All of the above were key factors. 
A)  skilled labor availability 
B)  U.S. laws to protect intellectual property 
C)  tax breaks from local and regional government 
D)  proximity to Intel's California headquarters 
E)  All of the above were key factors.

Question 15

When making a location decision at the region/community level, which of these would be considered?

Accepted Answer

A)  government rules, attitudes, stability, incentives 
B)  cultural and economic issues 
C)  cost and availability of utilities 
D)  zoning restrictions 
E)  air, rail, highway, waterway systems 
A)  government rules, attitudes, stability, incentives 
B)  cultural and economic issues 
C)  cost and availability of utilities 
D)  zoning restrictions 
E)  air, rail, highway, waterway systems

Question 16

FedEx chose Memphis, Tennessee, as its U.S. hub because

Accepted Answer

A)  the city is in the center of the U.S., geographically 
B)  the airport has relatively few hours of bad weather closures 
C)  it needed a means to reach cities to which it did not have direct flights 
D)  the firm believed that a hub system was superior to traditional city-to-city flight scheduling 
E)  All of the above are true. 
A)  the city is in the center of the U.S., geographically 
B)  the airport has relatively few hours of bad weather closures 
C)  it needed a means to reach cities to which it did not have direct flights 
D)  the firm believed that a hub system was superior to traditional city-to-city flight scheduling 
E)  All of the above are true.

Question 17

Currency risk is based on what assumption?

Accepted Answer

A)  Firms that do not continuously innovate will lose market share. 
B)  Values of foreign currencies continually rise and fall in most countries. 
C)  Changing product lines by reacting to every current trend may alienate the customer base. 
D)  The value of one dollar today is greater than the value of one dollar to be received one year from now. 
E)  The U.S. stock market fluctuates daily. 
A)  Firms that do not continuously innovate will lose market share. 
B)  Values of foreign currencies continually rise and fall in most countries. 
C)  Changing product lines by reacting to every current trend may alienate the customer base. 
D)  The value of one dollar today is greater than the value of one dollar to be received one year from now. 
E)  The U.S. stock market fluctuates daily.

Question 18

Every month, a distribution center will deliver 14,000 units to Retailer A at coordinates (20, 10), 12,000 units, to Retailer B at coordinates (30, -15), and 20,000 units to Retailer C at coordinates (4, 4). Assuming no constraints on location, at what coordinates should the distribution center be located (rounded to two decimal places)?

Accepted Answer

(15.65, 0.87), where 15.65 = [

Question 19

A clothing chain is considering two different locations for a new retail outlet. The organization has identified the four factors listed in the following table as the basis for evaluation, and has assigned weights as shown on the right side of this table. The manager has rated each location on each factor, on a 100-point basis (higher scores are better), as shown in the right-hand table.
a. Calculate the composite score for each alternative location.
b. Which site should be chosen?
c. Are you concerned about the sensitivity and subjectivity of this solution? Comment.

Accepted Answer

The higher rated site is Chester, 74.5 t

Question 20

Consider the list of Key Success Factors in your textbook. Why do some items appear at the country level only, while others are present at both country and regional levels? Select one KSF as an example, and use it in your discussion.

Accepted Answer

A key success factor should appear where

Exam 8: Location Strategies

An example of an intangible cost, as it relates to location decisions, is the quality of education.

What describes a system that stores and displays information that can be linked to a geographic location?

In location planning, environmental regulations, cost and availability of utilities, and taxes are

The center-of-gravity method is used primarily to determine what type of locations?

Unfavorable exchange rates can offset other savings in a location decision.

The center-of-gravity method does not take into consideration the

Identify those factors identified in the textbook as creating legal or ethical issues for operations mangers as they analyze location decisions.

What kinds of location decisions are appropriate for use of center-of-gravity analysis? What variable is being optimized in this analysis?

FedEx schedules its aircraft using a __________ system, which it credits with reducing package mishandling and delay in transit.

Which of the following statements regarding the center-of-gravity method is false?

Which of the following was not a factor in determining the location of Intel's Arizona plant?

When making a location decision at the region/community level, which of these would be considered?

FedEx chose Memphis, Tennessee, as its U.S. hub because

Currency risk is based on what assumption?

Consider the list of Key Success Factors in your textbook. Why do some items appear at the country level only, while others are present at both country and regional levels? Select one KSF as an example, and use it in your discussion.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Inventory Management

Aggregate Planning

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Statistical Tools for Managers

Acceptance Sampling

The Simplex Method of Linear Programming

The Modi and Vam Methods of Solving Transportation Problems

Vehicle Routing and Scheduling

Managing Quality

Process Strategy

Supply-Chain Management

Vehicle Routing and Scheduling

Filters