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 ________.

A regional bookstore chain wants to build a distribution center that is centrally-located for its eight retail outlets. It will most likely employ which of the following tools of analysis?

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

A work system has five stations that have process times of 5, 9, 4, 6, and 8. What is the throughput time of the system?

Changes in capacity may lead, lag, or straddle the demand.

To find the throughput time with simultaneous processes, compute the time over all paths and choose the longest path through the system.

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments. But there are four other special "considerations" to making a good capacity decision. Identify them.

The graphic approach to locational cost-volume analysis displays the range of volume over which each location is preferable.

A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

What is the role of labor productivity in location decisions?

________ is a means of determining the discounted value of a series of future cash receipts.

Location decisions of goods-producing companies often assume that costs are relatively constant for a given area; therefore, the revenue function is critical.

Using the factor ratings shown below, determine which location alternative should be chosen on the basis of maximum composite score.

"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?

Traffic counts and demographic analysis of drawing area are associated with:

Consider the assembly line below. The three fabrication operations run in parallel, such that each batch of 20 units only needs to go through one of the three fabrication operations. After that, each batch needs to go through both assembly operations, which occur simultaneously (specifically, 10 components are made for each unit in the fabrication stage-some components are then assembled in the Assembly 1 area while others are assembled in the Assembly 2 area). The units are packaged and made ready for shipment in the final stage. What is the throughput time per batch of this operation?

A bread-making factory has the production process shown in the figure below. There are three operations (mixing, baking and packaging) in sequence, but it does not matter which oven is used. The factory is considering purchasing faster equipment to replace one of the existing operations. Which operation should be first considered?

Which of the following is among the eight determinants of revenue and volume for a service firm?

Which of the following statements regarding FedEx is TRUE?

Location A would result in annual fixed costs of $300,000 and variable costs of $55 per unit. Annual fixed costs at Location B are $600,000 with variable costs of $32 per unit. Sales volume is estimated to be 30,000 units per year. Which location has the lower cost at this volume? How large is its cost advantage? At what volume are the two facilities equal in cost?