Deck 8: A: Location Planning and Analysis

Question 1

The first step in the location decision process is to determine a short list of approximately 3 or 4 potential sites.

Answer 1

False

Question 2

The factor rating method of location planning uses a coordinate overlay to determine relative locations.

Answer 2

False

Question 3

Location decisions are basically one-time decisions that only pertain to newly formed organizations.

Answer 3

False

Question 4

As a result of the factor rating analysis,a manager may sometimes reject all of the alternatives under consideration when the composite scores of all the alternatives are below the minimum threshold value.

Question 5

For service organizations,the dominant factor in location analysis is usually market-related.

Question 6

Relative to manufacturing firms,location decisions for service businesses tend to be focused on revenue potential rather than being cost focused.

Question 7

New or small organizations often adopt an informal approach to location decisions.

Question 8

Since they can almost always be secured,government subsidies is not a significant factor in location decisions.

Question 9

For service and retail stores,a prime factor in location analysis is customer access.

Question 10

Taxes are an example of a community-related factor in location decisions.

Question 11

Corruption in foreign locations can generally be viewed as an advantage in attracting companies to Canada.

Question 12

Locating near customers is a primary factor for web-based businesses.

Question 13

For agricultural companies,locating close to raw materials is typically a necessity.

Question 14

One of the factors affecting location decisions is the company's position in the supply chain.

Question 15

Large national and international retailers such as Walmart,Sears,and Future Shop typically avoid locating in the same area as their competitors when opening a new store in a particular city.

Question 16

In site selection,land costs may be secondary to other factors.

Question 17

The fact that most types of firms are located in every section of the country suggests that in many cases,location decisions are not overly important.

Question 18

For manufacturing firms,two dominating factors in location analysis are abundance of energy and proximity to raw materials.

Question 19

The centre of gravity method is a location planning technique that determines a composite score from factor evaluation.

Question 20

Factor rating is limited to quantitative information concerning location decisions.

Question 21

Which of the following is not categorized as a community/site-related consideration in location planning?

A) Labour laws
B) Recreation facilities
C) Cost of land
D) Transportation systems
E) Medical facilities

Question 22

The centre of gravity method of location planning can only be used when the quantities to be shipped to each location are equal.

Question 23

A location analysis has been narrowed down to two locations,A and B.The main factors in the decision will be supply of raw materials,which has a weight of .50,transportation cost,which has a weight of .40,and labour cost,which has a weight of .10.The ratings for raw materials,transportation,and labour are for A-60,80,and 70,respectively; for B-70,50,and 90,respectively.Given this information and a minimum acceptable composite score of 75,we can say that the manager should:

A)be indifferent between these locations.
B)choose location A.
C)choose location B.
D)reject both locations.

Question 24

A factor that has caused problems for Canadian companies operating in foreign countries is:

A) tax laws.
B) raw materials.
C) corruption.
D) labour cost.
E) lack of markets.

Question 25

Which of the following statements concerning location analysis best typifies the situation for most location decisions?

A) Regional and country level factors are more important than local community factors.
B) Local community factors are more important than regional and country level factors.
C) Availability of raw materials tends to be the dominant factor.
D) Labour costs tend to emerge as the dominant factor.
E) One or more factors stated dominate the decision.

Question 26

Location decisions are a highly important part of production system design because:
I)typically they are made rather frequently
II)they impact operating costs
III)they entail a high-cost,short-term commitment

A) I
B) II
C) III
D) II and III
E) I, II, and III

Question 27

The method for evaluating location alternatives based on comparing composite (weighted-average)scores of both quantitative and qualitative criteria is:

A) break-even analysis.
B) transportation method.
C) factor rating analysis.
D) linear regression.
E) a Voronoi polygon.

Question 28

Which statement is not associated with the basic steps in the location decision process?

A) Eliminate some sites to develop a short list of three or four sites.
B) Identify important search parameters and factors.
C) Maximize the number of sites considered.
D) Visit short-listed sites.
E) Gather information on appropriate sites.

Question 29

Which of the following is not an accurate statement concerning location decisions?

A) Location decisions are influenced by the availability of labour.
B) The starting point for location decision process is developing a list of potential locations.
C) Location decisions generally involve long-term commitments.
D) Visiting a number of potential sites is typically part of the location decision process.
E) An organization's position in the supply chain influences location decisions.

Question 30

In location planning,land and building costs are considered:

A) regional factors.
B) community/site-related factors.
C) raw material considerations.
D) regional/country factors.
E) none of the above.

Question 31

Which of the following is not considered a reason for foreign firms to locate in Canada?

A) Decreased delivery time to Canadian customers
B) Access to Canadian natural resources
C) Canadian workers are well educated
D) Energy costs are low
E) Lack of government involvement in location decisions

Question 32

The method for determining location alternatives which minimizes distribution costs is:

A) break-even analysis.
B) transportation method.
C) factor rating analysis.
D) linear regression.
E) centre of gravity method.

Question 33

In location planning,the location of raw materials,the location of markets and labour factors are considered:

A) regional factors.
B) community factors.
C) site-related factors.
D) the basis of negotiating government subsidies.
E) none of the choices are factors.

Question 34

Which of the following are basic steps in the location decision process?
I)Identify important search parameters and factors
II)Gather information on appropriate sites
III)Visit short-listed sites
IV)Evaluate the alternatives and make a selection

A) II and III only.
B) I, II, and III only.
C) II, III, and IV only.
D) I, II only.
E) I, II, III, and IV

Question 35

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

A) break-even analysis.
B) factor rating.
C) transportation method.
D) expected value.
E) a Voronoi polygon.

Question 36

The centre of gravity method is useful in location planning for the location of a distribution centre.

Question 37

Which of the following are community/site-related considerations in location decisions?
I)Location of raw materials.
II)Labour laws.
III)Land prices.
IV)Room for expansion.

A) I, II
B) I, III
C) III, IV
D) I, III, IV
E) I, II, III, IV

Question 38

The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is:

A) break-even analysis.
B) transportation method.
C) factor rating analysis.
D) linear regression.
E) a Voronoi polygon.

Question 39

In location planning,land prices,transportation types,and taxes are:

A) regional/country factors.
B) community/site-related factors.
C) market factors.
D) irrelevant factors.
E) none of the choices.

Question 40

Which of the following is least likely to be a country (national)factor in location decisions?

A) Location of raw materials
B) Markets
C) Government subsidies
D) Zoning/regulations
E) Labour factors

Question 41

If it is estimated that thirty persons will be living in this new chapter house,which location should PhUN select?

A) Alpha Ave.
B) Beta Blvd.
C) Either Alpha Ave. or Beta Blvd.
D) Neither Alpha Ave. nor Beta Blvd.

Question 42

What would be total annual costs for either location at the point of indifference?

A) $26,000
B) $28,000
C) $30,000
D) $32,000
E) $34,000

Question 43

If annual demand is estimated to be 20,000 units,which location should the company select?

A) Atlanta.
B) Phoenix
C) Either Atlanta or Phoenix.
D) Neither Atlanta nor Phoenix.

Question 44

What is the composite score for location B?

A) 69
B) 72
C) 75
D) 79
E) 82

Question 45

What is the composite score for location C?

A) 69
B) 72
C) 75
D) 79
E) 82

Question 46

If the selection criterion is the greatest composite score,management should:

A)choose location A.
B)choose location B.
C)choose location C.
D)be indifferent between B and C.
E)reject all locations.

Question 47

What is the composite score for location A?

A) 69
B) 72
C) 75
D) 79
E) 82

Question 48

If the selection criterion is the greatest composite score exceeding 70,management should:

A)reject location A.
B)reject location B.
C)reject location C.
D)be indifferent between locations B and C.
E)reject all locations.

Question 49

What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?

A) $280,000
B) $140,000
C) $220,000
D) $300,000
E) $156,000

Question 50

Which of the following is not an accurate statement concerning the Voronoi polygon approach to location analysis for companies with multiple facilities?

A) Each polygon contains one facility.
B) Any point within a polygon is closer to the centre of its polygon than any other polygon.
C) Lawson's algorithm is a technique for determining Volonoi polygons.
D) A city or town being analyzed is broken up into multiple overlapping polygons.
E) Analysis is based on the Euclidian distance between two points.

Question 51

If the annual demand is 20,000 units,what would be the cost advantage of the better location?

A) $20,000
B) $460,000
C) $480,000
D) $80,000
E) $60,000

Question 52

If the shipments of fabric to each plant are equal,what is the optimal location for the fabric plant?

A) 5,5
B) 6,4
C) 4,6
D) 6,2
E) 5,4

Question 53

At what annual output would the company be indifferent between the two locations?

A) 60,000 units
B) 15,000 units
C) 10,000 units
D) 20,000 units
E) 4,000 units

Question 54

Shipments of fabric to each plant vary per week as follows: plant A,200 units; plant B,400 units; plant C,300 units; plant D,300 units; and plant E,200 units.What is the optimal location for the fabric plant?

A) 6.2, 3.0
B) 6.0, 4.0
C) 6.5, 5.3
D) 5.6, 4.4
E) 5.0, 3.0

Question 55

Determine the centre of gravity location for the destinations and shipping quantities shown below:

Question 56

What would be total annual costs for the Alpha Ave.location with 20 persons living there?

A) $4,000
B) $10,000
C) $16,000
D) $20,000
E) $26,000

Question 57

Weekly shipments to each warehouse will be: WH1,100; WH2,150; WH3,120; WH4,150; and WH5,120.What is the optimal location of the distribution centre?

A) 5.1, 4.2
B) 5.2, 4.0
C) 5.1, 5.1
D) 4.2, 5.1
E) 4.9, 5.2

Question 58

How many people would be living in the new chapter house at the point of indifference?

A) 20
B) 30
C) 40
D) 50
E) 60

Question 59

If weekly shipments to each warehouse will be approximately equal,what is the optimal location for the distribution centre?

A) 5,5
B) 5,4
C) 4,5
D) 5,6
E) 6,5

Question 60

What would be the total annual costs at the point of indifference?

A) $300,000
B) $240,000
C) $380,000
D) $220,000
E) $760,000

Question 61

What are total costs for site C for a quantity of 5,000 units per year?

Question 62

For what quantity would you be indifferent between selecting site B or site C?

Question 63

What are total costs for site B for a quantity of 5,000 units per year?

Question 64

What are total costs for site A for a quantity of 5,000 units per year?

Question 65

A firm is trying to decide between two location alternatives,A and B.A would result in annual fixed costs of $60,000,labour costs of $7 per unit,material costs of $10 per unit,transportation costs of $15 per unit,and revenue per unit of $50.Location B would have annual fixed costs of $80,000,labour costs of $6 per unit,material costs of $9 per unit,transportation costs of $14 per unit,and revenue per unit of $48.
(i)At an annual volume of 9,000,which would yield the higher profit?
(ii)At what annual volume would management be indifferent between the two alternatives in terms of annual profits?

Question 66

For the preferred site for 20,000 units per year,what would be your total costs?

Question 67

For the preferred site for 20,000 units per year,what would be your cost savings compared to each of the other two sites?

Question 68

For what range of output would you prefer site C?

Question 69

For what range of output would you prefer site B?

Question 70

Given,the information below on scores of three location alternatives,which alternative would you recommend?
Why?

Question 71

For what range of output would you prefer site A?

Question 72

For what quantity would you be indifferent between selecting site A or site B?

Question 73

A manager must decide between two location alternatives,Montreal and Toronto.Montreal would have annual fixed costs of $80,000,transportation costs of $80 per unit,and labour and material costs of $70 per unit.Toronto would have annual fixed costs of $150,000,transportation costs of $20 per unit,and labour and material costs of $80 per unit.Revenue will be $250 per unit.
(i)Which alternative would yield the higher profit for an annual demand of 2,000 units?
(ii)At what volume (quantity)would the manager be indifferent in terms of which of the two locations were chosen?
What would the profit be at that volume?

Question 74

Determine the optimum location for a distribution centre to serve the following locations.Shipments to each location will be approximately equal.