Question 1

How do service facility location decisions differ from industrial location decisions in terms of the techniques used to analyse them?

Accepted Answer

Service location decisions tend to focus on the revenue function,whereas manufacturing/industrial location decisions tend to focus on costs.The service sector uses techniques such as correlation analysis,traffic counts,demographic analysis,and purchasing power analysis.The industrial decision uses transportation method,factor-weighting approach,break-even analysis,and crossover charts.

Question 2

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

Accepted Answer

The centre-of-gravity technique is appropriate when the location decision must find a single centrally-located site to serve any number of outlying points;locating a distribution centre to serve a dozen retail stores is an example.The analysis leads to a location that (approximately)minimizes the distribution cost (or total distance traveled)between all outlying points and the centre or hub.

Question 3

In location decisions,intangible costs are easier to measure than tangible costs.

Accepted Answer

A) True 
 B)False  False

Question 4

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

Question 5

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

Accepted Answer

A) government rules,attitudes,stability,incentives 
B) cultural and economic issues 
C) zoning restrictions 
D) environmental impact issues 
E) proximity to raw materials and customers 
A) government rules,attitudes,stability,incentives 
B) cultural and economic issues 
C) zoning restrictions 
D) environmental impact issues 
E) proximity to raw materials and customers

Question 6

Every month,a distribution centre 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 centre be located (rounded to two decimal places)?

Accepted Answer

(15.65,0.87),where 15.65 = [20

Question 7

How does the Starbucks Coffee case illustrate the general principles of service location strategy?

Accepted Answer

Starbucks Coffee clearly selects sites o

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

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) factor-rating analysis. 
B) cost-volume analysis. 
C) transportation model analysis. 
D) linear regression analysis. 
E) crossover analysis. 
A) factor-rating analysis. 
B) cost-volume analysis. 
C) transportation model analysis. 
D) linear regression analysis. 
E) crossover analysis.

Question 12

The ratio of labour cost per day to productivity,in units per day,is the labour cost per unit.

Accepted Answer

A) True 
 B)False

Question 13

Why is Northern Mexico used as a cluster for electronics firms?

Accepted Answer

A) high traffic flows 
B) venture capitalists located nearby 
C) natural resources of land and climate 
D) NAFTA 
E) high per capita GDP 
A) high traffic flows 
B) venture capitalists located nearby 
C) natural resources of land and climate 
D) NAFTA 
E) high per capita GDP

Question 14

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 15

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 16

Which of the following is not one of the eight determinants of revenue and volume for a service firm?

Accepted Answer

A) uniqueness of the firm's and the competitor's locations 
B) quality of the competition 
C) quality of management 
D) purchasing power of the customer-drawing area 
E) quality of raw materials 
A) uniqueness of the firm's and the competitor's locations 
B) quality of the competition 
C) quality of management 
D) purchasing power of the customer-drawing area 
E) quality of raw materials

Question 17

Globalization of the location decision is the result of all of the following except

Accepted Answer

A) market economics. 
B) higher quality of labour overseas. 
C) ease of capital flow between countries. 
D) high differences in labour costs. 
E) more rapid,reliable travel and shipping. 
A) market economics. 
B) higher quality of labour overseas. 
C) ease of capital flow between countries. 
D) high differences in labour costs. 
E) more rapid,reliable travel and shipping.

Question 18

An employee produces 15 parts during a shift in which he made $90.The labour content of the product is

Accepted Answer

A) $90. 
B) $5. 
C) $6. 
D) $.167. 
E) $60. 
A) $90. 
B) $5. 
C) $6. 
D) $.167. 
E) $60.

Question 19

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

Accepted Answer

A) based on competitiveness 
B) based on cost of doing business 
C) based on corruption 
D) based on magnitude of government social programs 
E) based on average duration between presidential/prime minister elections 
A) based on competitiveness 
B) based on cost of doing business 
C) based on corruption 
D) based on magnitude of government social programs 
E) based on average duration between presidential/prime minister elections

Question 20

________ and ________ are to key country success factors as ________ and ________ are to key region success factors.

Accepted Answer

A) Cultural issues;location of markets;site size and cost;zoning restrictions 
B) Exchange rates;labour availability;site size and cost;environmental impact 
C) Labour cost;currency risk;land costs;proximity to customers 
D) Land costs;proximity to customers;labour cost;air and rail systems 
E) Cultural issues;proximity to customers;environmental impact;zoning restrictions. 
A) Cultural issues;location of markets;site size and cost;zoning restrictions 
B) Exchange rates;labour availability;site size and cost;environmental impact 
C) Labour cost;currency risk;land costs;proximity to customers 
D) Land costs;proximity to customers;labour cost;air and rail systems 
E) Cultural issues;proximity to customers;environmental impact;zoning restrictions.

Exam 8: Location Strategies

How do service facility location decisions differ from industrial location decisions in terms of the techniques used to analyse them?

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

In location decisions,intangible costs are easier to measure than tangible costs.

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.

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

How does the Starbucks Coffee case illustrate the general principles of service location strategy?

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

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

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

The ratio of labour cost per day to productivity,in units per day,is the labour cost per unit.

Why is Northern Mexico used as a cluster for electronics firms?

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

Which of the following is not one of the eight determinants of revenue and volume for a service firm?

Globalization of the location decision is the result of all of the following except

An employee produces 15 parts during a shift in which he made $90.The labour content of the product is

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

________ and ________ are to key country success factors as ________ and ________ are to key region success factors.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy and Sustainability

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 Mrpand Erp

Short-Term Scheduling

Jit and Lean Operations

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

and are to key country success factors as and are to key region success factors.