Question 1

The center-of-gravity method finds the location of a centralized facility, such as a distribution center, that will maximize the organization's revenue.

Accepted Answer

A) True 
 B)False

Question 2

Labor cost and labor availability often drive the location decision in the call center industry.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor?

Accepted Answer

A)  Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. 
B)  Few people will travel out-of state for a haircut. 
C)  Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. 
D)  Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. 
E)  Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source. 
A)  Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. 
B)  Few people will travel out-of state for a haircut. 
C)  Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. 
D)  Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. 
E)  Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source.

Question 4

An approach to location analysis that includes both qualitative and quantitative considerations is

Accepted Answer

A)  locational cost-volume 
B)  factor-rating 
C)  transportation model 
D)  assignment method 
E)  make or buy analysis 
A)  locational cost-volume 
B)  factor-rating 
C)  transportation model 
D)  assignment method 
E)  make or buy analysis

Question 5

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

Accepted Answer

A)  corporate desires 
B)  land/construction costs 
C)  air, rail, highway, waterway systems 
D)  zoning restrictions 
E)  location of markets 
A)  corporate desires 
B)  land/construction costs 
C)  air, rail, highway, waterway systems 
D)  zoning restrictions 
E)  location of markets

Question 6

A manufacturing company is considering three expansion options. The first is to do nothing (Option
A). The next is to leave the current plant open and also open a new larger plant (Option
B). Finally they could close the existing plant and open the new, larger one (Option
C). Given the VC and FC from the table below calculate the range for which each option minimizes cost.
 $$\begin{array} { | l | l | l | } 
\hline \text { Option } & \text { FC } ( \$ ) & \text { VC (\$/unit) } \
\hline \mathrm { A } & 50000 & 2 \
\hline \mathrm { B } & 100000 & 1 \
\hline \mathrm { C } & 60000 & 1.4 \
\hline
\end{array}$$

Accepted Answer

Attached is the graph of the total cost

Question 7

The factor-rating method can consider both tangible and intangible costs.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

Crossover analysis is appropriate when t

Question 9

Which of the following is a location analysis technique typically employed by a manufacturing organization?

Accepted Answer

A)  transportation method 
B)  queuing theory 
C)  correlation analysis and traffic counts 
D)  simulation 
E)  demographic analysis 
A)  transportation method 
B)  queuing theory 
C)  correlation analysis and traffic counts 
D)  simulation 
E)  demographic analysis

Question 10

Why is "quality of life" an element of intangible costs associated with location decisions?
 Provide an example as part of your discussion.

Accepted Answer

Quality of life affects location decisio

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Databases containing such variables as street maps, utilities, population age and income, and the software that analyzes such data for location decisions, are referred to as __________.

Accepted Answer

Geographic

Question 14

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?

Accepted Answer

Since each store has the same demand the

Question 15

Environmental Glass Products, Inc. wants to build a new centralized facility to receive household, commercial, and industrial glass for recycling. This center will be supplied by trucks coming from four "collection points," where recyclable glass is dropped off by individuals and businesses. The volume and the map coordinates for the four collection centers are shown below. Where should the collection center be located?
 $$\begin{array} { | c | c | c | } 
\hline \text { Collection point } & \text { Load } & ( \mathrm { X } , \mathrm { Y } ) \text { Coordinates } \
\hline \text { A } & 9,000 & ( 4,8 ) \
\hline \text { B } & 4,000 & ( 7,2 ) \
\hline \text { C } & 2,000 & ( 4,1 ) \
\hline \text { D } & 5,000 & ( 7,3 ) \
\hline
\end{array}$$

Accepted Answer

The center should be built near coordina

Question 16

Which of the following is most likely to affect the location strategy of a manufacturing firm?

Accepted Answer

A)  appearance/image of the area 
B)  utility costs 
C)  purchasing power of drawing area 
D)  competition in the area 
E)  parking availability 
A)  appearance/image of the area 
B)  utility costs 
C)  purchasing power of drawing area 
D)  competition in the area 
E)  parking availability

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Suppose that a bus company is deciding where to locate its central hub. There are 6 possible destinations for the buses. Suppose that the center of town will be used as the reference for describing the possible destinations. A is located 5 miles South and 3 miles West. B is located 3 miles North and 2 miles East. C is located 1 mile South and 5 miles East. D is located 2 miles North and 3 miles West. E is located exactly in the center of town. F is located 10 miles North and 5 miles East. Assume that traffic to each destination will be equal. Where should the hub go so that travel time is minimized?

Accepted Answer

Since each site has the same demand the

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

One reason for a firm locating near its competitors is the presence of a major resource it needs.

Accepted Answer

A) True 
 B)False

Exam 10: Location Strategies

The center-of-gravity method finds the location of a centralized facility, such as a distribution center, that will maximize the organization's revenue.

Labor cost and labor availability often drive the location decision in the call center industry.

Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor?

An approach to location analysis that includes both qualitative and quantitative considerations is

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

The factor-rating method can consider both tangible and intangible costs.

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.

Which of the following is a location analysis technique typically employed by a manufacturing organization?

Why is "quality of life" an element of intangible costs associated with location decisions? Provide an example as part of your discussion.

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.

Currency risk is based on what assumption?

Databases containing such variables as street maps, utilities, population age and income, and the software that analyzes such data for location decisions, are referred to as __________.

Which of the following is most likely to affect the location strategy of a manufacturing firm?

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

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

One reason for a firm locating near its competitors is the presence of a major resource it needs.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy

Capacity and Constraint Management

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Outsourcing as a Supply-Chain Strategy

Inventory Management

Aggregate Planning

Material Requirements Planning MRP and ERP

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters