Exam 10: Location Strategies

A highway contractor needs to locate a single supply point to provide road building materials to four projects. The four projects, which are all approximately the same magnitude, are located at the following coordinates. Coordinate units are in miles. (East) (North) Project A 50 10 Project B 15 60 Project C 40 60 Project D 30 20 a. On the grid below, plot the locations of the four road-building sites. Properly label all points. b. What is the center of gravity? c. If a single truck were sent from center-of-gravity to each project and back (four round trips), how many miles would be traveled? (Hint: use the Pythagorean Theorem C = $\sqrt { A ^ { 2 } + B ^ { 2 } }$ ). d. Add the calculated center of gravity to the grid.

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

__________ costs are readily identifiable and can be measured with precision.

Identify five factors that affect location decisions at the site level.

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

A contractor for the military is looking for a new location for a supply depot. The depot will supply four bases whose tonnage (demand) and map coordinates are shown below. If management wants the depot to have a central location, what should be its map coordinates? Bases (,) Coordinates Tonnage Fort Able (40,110) 30,000 Base Baker (70,50) 60,000 Camp Charlie (90,20) 35,000 Camp Delta (70,80) 75,000

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?

On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which

Service firms choose locations based, in part, on the revenue potential of a site.

Service location strategies and goods-producing location strategies rely on very different sets of assumptions. What are the assumptions associated with goods-producing locations? How do these assumptions lead to a location strategy?

A manager has received an analysis of several cities being considered for a new order fulfillment center (warehouse) for Shop at Home Network. The scores (scale is 10 points = best) are contained in the table below. a. If the manager weights the factors equally, how would the locations be ranked? b. If transportation costs and operating costs are given weights that are double the weights of the others, should the locations be ranked differently? Location Factor Business services 7 9 5 4 Community services 5 7 6 7 Real estate cost 7 3 8 6 Construction costs 8 6 6 5 Operating costs 5 4 7 6 Business taxes 6 9 6 4 Transportation costs 8 6 7 8

A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below. a. Complete a numeric locational cost-volume analysis. b. Indicate over what range each of the alternatives A, B, C is the low-cost choice. c. Is any alternative never preferred? Explain. $\begin{array} {| l | c | c | c | } \hline \text { Costs } & \text { A } & \text { B } & \text { C } \\\hline \text { Fixed (\$) } & 2,500,000 & 2,000,000 & 3,500,000 \\\hline \text { Variable (\$ per unit) } & 21 & 25 & 15 \\\hline\end{array}$

Which of the following workers is the most productive?

__________ is a cost-volume analysis to make an economic comparison of location alternatives.

Geographic Information Systems can assist the location decision by

LaQuinta Motor Inns has a competitive edge over its rivals because it

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. Factor Factor Description Weight 1 Average community income .40 2 Community growth potential .25 Availability of public 3 transportation .15 4 Labor cost .20 Barclay Chester 30 20 40 30 20 20 10 30 What is the score for Chester?

Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking?

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

Which of the following statements regarding "proximity" in the location decision is False?