Deck 11: Supply Chain Location Decisions

Question 1

More than 80 percent of all relocations are within 10 miles of the first location,so usually the existing workforce is displaced.

Answer 1

False

Question 2

Qualitative factors are typically evaluated in terms of dollars in the preference matrix method.

Answer 2

False

Question 3

A preference matrix is a special case application of the load-distance method of comparing several potential site locations.

Answer 3

False

Question 4

Service location decisions are driven primarily by the operating costs at the locations under consideration.

Question 5

When outbound transportation costs are a dominant factor,manufacturing facilities should be located close to suppliers and resources needed for production.

Question 6

Critical mass is a situation whereby several competing firms cluster near one location,and thus attract more customers than the total number who would shop at the same stores in scattered locations.

Question 7

One dominant factor in locating manufacturing facilities is a favorable labor climate.

Question 8

A preference matrix permits consideration of more location factors than both the transportation method and the load-distance model.

Question 9

On average,it is less expensive to relocate a service-oriented business than a manufacturing business.

Question 10

If the customer must be physically present at the process,location is an important issue.

Question 11

When using the load-distance method to select a new location,the decision maker can represent the number of trips to be made,the number of customers needing a physical presence,or number of tons per week,among other measures,as loads.

Question 12

A geographic information system contains demographic information.

Question 13

A decision maker using break-even analysis must assume that suppliers do not provide discounts for large orders.

Question 14

Repeated onsite expansion ultimately leads to diseconomies of scale.

Question 15

Traffic flows are one dominant factor in locating manufacturing location.

Question 16

Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high impact on the company's ability to meet its goals and the factors themselves must be affected by the location decision.

Question 17

Break-even analysis can help a manager compare location alternatives on the basis of quantitative factors that can be expressed in terms of total cost.

Question 18

Many firms are concluding that large,centralized manufacturing facilities in low-cost countries with poorly trained workers are not sustainable.

Question 19

When comparing several sites,typically a company will pick specific available site locations,then broaden their choices to communities,and finally to alternate regions.

Question 20

The center of gravity method considers a greater number of location factors than the break-even analysis.

Question 21

A quantitative method used to evaluate single locations based primarily on proximity is:

A)break-even analysis.
B)the transportation method.
C)a preference matrix.
D)the load-distance method.

Question 22

Which of these is NOT identified as a component of a geographical information system?

A)hardware
B)data
C)software
D)network

Question 23

Because Geographical Information System (GIS)tools are primarily quantitative in nature,a firm's managerial criteria,such as proximity to major metropolitan areas,are not able to be included in the GIS analysis.

Question 24

When a firm with a network of existing facilities plans a new facility,the new facility is assumed to operate independently of the existing ones.

Question 25

Which of the following location factors was NOT found to dominate location decisions for new U.S.manufacturing plants?

A)proximity to the parent company's facilities
B)quality of life
C)proximity to competitors' facilities
D)favorable labor climate

Question 26

A dummy plant is useful for problems where the sum of the plant capacities equals the sum of the demands.

Question 27

The transportation method provides optimal solutions for minimization of shipping costs in multiple facility location problems.

Question 28

Quality of life issues include:

A)proximity to markets.
B)prevailing wage rates.
C)local and state taxes.
D)recreational facilities.

Question 29

Most firms that choose to relocate operations have:

A)more than 500 employees.
B)more than 100 employees but fewer than 500 employees.
C)more than 10 employees but fewer than 100 employees.
D)fewer than 10 employees.

Question 30

Which of the following statements about company relocations is best?

A)Less than 80 percent of all relocations are made within 20 miles of companies' original locations.
B)More than 80 percent of all relocations are made within 20 miles of companies' original locations.
C)More than 20 percent of all relocations are made within 8 miles of companies' original locations.
D)Less than 20 percent of all relocations are made within 80 miles of companies' original locations.

Question 31

Which of the following usually is an advantage of on-site expansion,compared to building a new facility?

A)reduced construction time and costs
B)focused facility
C)simplified production control
D)reduced transportation cost

Question 32

An important factor for locating new manufacturing plants is:

A)proximity to customers.
B)location of competitors.
C)proximity to markets.
D)favorable labor climate.

Question 33

Simulation is a procedure used to determine the "best" solution that generally uses simplified and less realistic views of a problem.

Question 34

Which of the following statements about locating facilities in the service sector is best?

A)The factors that apply to manufacturing firms often also apply to service facilities,but the impact of the location on sales and customer satisfaction is an important addition.
B)Management should avoid locating facilities where competitors are already well established,as illustrated by new car showrooms.
C)Creating a critical mass is a strategy that avoids locating near competing firms.
D)"Site specific" factors are the main reason for locating warehousing and distribution operations near the customer.

Question 35

Which of these is NOT a common functionality of a GIS?

A)data storage
B)communication
C)map display
D)modeling

Question 36

A favorable labor climate might include all of the following EXCEPT:

A)a good work ethic.
B)no union presence.
C)high average wages.
D)an educated work force.

Question 37

Geographical Information System (GIS)tools are useful in solving single-facility location problems,but because of software limitations,cannot be used for determining multiple-facility locations.

Question 38

Which one of the following is usually an advantage of building a new facility,compared to on-site expansion?

A)reducing construction time and costs
B)keeping management together
C)reducing transportation costs
D)not splitting up operations

Question 39

When using Geographical Information System (GIS)tools to solve multiple-facility location problems,an analyst may also use load-distance scores and center of gravity data to arrive at trial locations.

Question 40

Solution guidelines,or rules of thumb,that find feasible-but not necessarily the best-solutions to problems are called heuristics.

Question 41

McKenna Restaurant wishes to open a new store.Based on the following subjective criteria,where 10 is excellent and 0 is poor,where should the new store be located?

A)A
B)B
C)C
D)D

Question 42

Which of the following statements about break-even analysis is incorrect?

A)No start-up costs exist.
B)Economies of scale cannot be achieved.
C)Variable costs vary as output changes.
D)Fixed costs vary as output changes.

Question 43

Table 11.1
Four departments are located in adjacent bays in the same loading dock.The distance between adjacent bays is 30 feet,the distance between bays separated by another (Alpha and Charlie,Bravo and Delta)is 60 feet,and the distance between Alpha and Delta is 90 feet.Material flows (loads)between departments are shown in the Table below.

Use the information from Table 11.1.Calculate the load distance for location Alpha.

A)2100
B)6450
C)4350
D)2250

Question 44

Which of these distance calculation methods provides the most accurate input to a load-distance calculation?

A)GIS
B)rectilinear distance
C)Euclidean distance
D)center of gravity

Question 45

A quantitative method used to evaluate multiple locations based on total cost of production or service operations is called:

A)break-even analysis.
B)the transportation method.
C)a preference matrix.
D)the load-distance method.

Question 46

Acme Fasteners desires to locate a new facility.Based on preliminary analysis,the choice has been reduced to four locations: A,B,C,and D.These four locations were rated on a scale from 1 (worst)to 10 (best)on each of four criteria.Each criterion was also weighted to indicate its importance (i.e. ,the higher the weight,the more important).The list of ratings and weights follows. Based on weighted scores,where should Acme locate its new facility?

A)A
B)B
C)C
D)D

Question 47

Which of these is most likely to be classified as a "load" when using the load-distance model?

A)a process
B)a supplier
C)a shipment
D)a customer

Question 48

Table 11.3
Durham Toy,Inc.has five distribution centers at the location coordinates given as follows.The monthly demand at each center is also given.

Use the information in Table 11.3.If the plant is located at the center of gravity,what is the load-distance score,assuming rectilinear distance?

A)less than or equal to 1500
B)more than 1500 but less than or equal to 1600
C)more than 1600 but less than or equal to 1700
D)more than 1700

Question 49

The load-distance model is used to minimize the total:

A)number of loads.
B)distance traveled.
C)cost of doing business.
D)profit of competitors.

Question 50

Table 11.1
Four departments are located in adjacent bays in the same loading dock.The distance between adjacent bays is 30 feet,the distance between bays separated by another (Alpha and Charlie,Bravo and Delta)is 60 feet,and the distance between Alpha and Delta is 90 feet.Material flows (loads)between departments are shown in the Table below.

Use the information from Table 11.1.Calculate the total load distance for this layout.

A)3930
B)18480
C)9240
D)12660

Question 51

The point has been reached where a biotechnology research and development company must expand by building a new facility.The search has been narrowed to four locations,all of which are acceptable to management.The assessment of these sites is being made on the basis of the six subjective location factors that follow.Management has agreed to use a five-point scale (Excellent = 5,Very good = 4,Good = 3,Fair = 2,Poor = 1)to quantify and compare their subjective opinions about the relative goodness of the sites.The weight reflects the importance of each factor in the decision. Calculate the weighted score for each alternative.Which location would you recommend?

A)A
B)B
C)C
D)D

Question 52

The center of gravity technique does not take into consideration the:

A)total volume of product any given site receives.
B)location of any given site.
C)number of locations that must be served.
D)balance of supply and demand.

Question 53

Which of the following is an example of an organization using the Geographical Information System (GIS)method for locating multiple facilities?

A)A company that is searching for a location for its combination manufacturing plant and warehouse to better serve several geographical regions of the country.
B)Load-distance scores and center of gravity data being used to locate a facility to provide better customer service for multiple customers.
C)A company that is searching for a manufacturing plant location that provides enough space for the plant to double in size over the next five years.
D)A hospital network that wants to locate several satellite medical facilities in outlying areas to better serve a major metropolitan area.

Question 54

Table 11.3
Durham Toy,Inc.has five distribution centers at the location coordinates given as follows.The monthly demand at each center is also given.

Use the information in Table 11.3.What are the x and y coordinates for the center of gravity?

A)x > 14,y > 15
B)x < 14,y > 15
C)x <14,y < 15
D)x > 14,y < 15

Question 55

Widgets,Inc.wishes to locate two new manufacturing facilities.Based on the following subjective criteria,where should the new facilities be located? (Excellent = 5,Very good = 4,Good = 3,Fair = 2,Poor = 1)

A)B and D
B)A and D
C)C and D
D)D and E

Question 56

Table 11.2
A single facility is needed to meet the demands of four markets.The locations and demands of these four markets are shown below.

Use the information from Table 11.2.What are the x and y coordinates for the center of gravity?

A)x > 6,y > 7
B)x > 6,y < 7
C)x < 6,y > 7
D)x < 6,y < 7

Question 57

Which of the following statements concerning the use of the Geographical Information System (GIS)method for locating multiple facilities is TRUE?

A)GIS helps with general facility locations,but is not able to identify specific locations because the transportation structure of roads and interstate highways can't be included in the GIS databases.
B)Load-distance scores and center of gravity data can be merged with customer databases to arrive at trial locations for facilities.
C)When locating two new facilities,the entire operating area is split into four subregions,two for each new facility,so the best two locations from the four subregions can be selected.
D)One weakness of the GIS method is that it is slow and cumbersome,and significant time must be allowed in order to reach a reasonable multiple-facility location decision.

Question 58

The Hunan Restaurant wishes to locate a new facility.Based on the following subjective criteria,where should the new facility be located? (Very good = 5,Good = 4,Fair = 3,Poor = 2,and Very poor = 1)

A)A
B)B
C)C
D)D

Question 59

Sweet Candy,Inc.wishes to open two new stores.Based on the following subjective criteria,where should the new stores be located? The higher the score,the better.

A)A and B
B)B and C
C)B and D
D)B and E

Question 60

Table 11.1
Four departments are located in adjacent bays in the same loading dock.The distance between adjacent bays is 30 feet,the distance between bays separated by another (Alpha and Charlie,Bravo and Delta)is 60 feet,and the distance between Alpha and Delta is 90 feet.Material flows (loads)between departments are shown in the Table below.

Use the information from Table 11.1.Calculate the load distance for location Bravo.

A)3090
B)3300
C)2100
D)1200

Question 61

The Burdell Company has four distribution centers located at the location coordinates given as follows.The monthly demand at each center is also given. Management wants to build a new plant that would be located at the center of gravity of the four distribution centers.Which of the following options best represents the coordinates of the new plant location?

A)x coordinate is greater than 150 but less than 170;y coordinate is greater than 210 but less than 230.
B)x coordinate is greater than 150 but less than 170;y coordinate is greater than 230 but less than 250.
C)x coordinate is greater than 170 but less than 190;y coordinate is greater than 210 but less than 230.
D)x coordinate is greater than 170 but less than 190;y coordinate is greater than 230 but less than 250.

Question 62

Table 11.4
Royal Flush Plumbing Supplies has the following demand forecasts for the five markets that it serves:

Use the information in Table 11.4.If Royal Flush decides to locate a warehouse at market D,what is the total load-distance score? (Use rectilinear distance. )

A)less than 400
B)between 401 and 450
C)between 451 and 500
D)more than 500

Question 63

Table 11.7
Nuts-and-Bolts,Inc.wishes to find the best location for a plant that will satisfy customer demand in the following five areas.

Use the information in Table 11.7.If the plant is located at the coordinates (5,5),what is the total load-distance score,assuming Euclidean (straight line)distance?

A)less than or equal to 600
B)more than 600 but less than or equal to 700
C)more than 700 but less than or equal to 800
D)more than 800

Question 64

Table 11.6
Union Fork,Inc.has five distribution centers located at the location coordinates given as follows.The demand at each center is also given.

Use the information in Table 11.6.What are the x and y coordinates for the center of gravity?

A)x > 7.5,y > 6
B)x > 7.5,y < 6
C)x < 7.5,y > 6
D)x < 7.5,y < 6

Question 65

Table 11.6
Union Fork,Inc.has five distribution centers located at the location coordinates given as follows.The demand at each center is also given.

Use the information in Table 11.6.If a plant is located at a center of gravity,what is the load-distance score,assuming rectilinear distance?

A)less than or equal to 500
B)more than 500 but less than or equal to 550
C)more than 550 but less than or equal to 600
D)more than 600

Question 66

Table 11.7
Nuts-and-Bolts,Inc.wishes to find the best location for a plant that will satisfy customer demand in the following five areas.

Use the information in Table 11.7.If the plant is located at the coordinates (5,5),what is the total load-distance score,assuming rectilinear distance?

A)less than or equal to 600
B)more than 600 but less than or equal to 700
C)more than 700 but less than or equal to 800
D)more than 800

Question 67

A single facility is needed to meet the demand of four regions depicted as follows: If the plant is located at A,what is the total load-distance score,assuming Euclidean (straight line)distance?

A)less than or equal to 100
B)more than 100 but less than or equal to 140
C)more than 140 but less than or equal to 180
D)more than 180

Question 68

Bill Burns,district manager of the Pizza Palace,wishes to locate a new store in the metropolitan areas.Using the following information,what are the x and y coordinates for the center of gravity? Don't round your answer up or down before making your choice.

A)x is less than or equal to 4;y is less or equal to than 4.5.
B)x is greater than or equal to 5;y is greater than or equal to 3.5.
C)x is less than or equal to 3.5;y is less than or equal to 4.5.
D)x is less than or equal to 4;y is greater than or equal to 4.5.

Question 69

Table 11.4
Royal Flush Plumbing Supplies has the following demand forecasts for the five markets that it serves:

Use the information in Table 11.4.What is the center of gravity?

A)x < 7,y < 8
B)x > 7,y < 8
C)x < 7,y > 8
D)x > 7,y > 8

Question 70

Pinkerton Company has four distribution centers located at the location coordinates given.The monthly demand at each center is also given. Assume that management is considering locating its new plant at distribution center A.What is the load-distance score,assuming rectilinear distance?

A)less than 33,000
B)greater than 33,000 but less than 33,500
C)greater than 33,500 but less than 34,000
D)greater than 34,000

Question 71

A national drugstore chain prefers to operate one outlet in a town that has four major market segments.The number of potential customers in each segment,along with the location coordinates,are given below. Which would be the best location using the center of gravity method?

A)x > 10,y < 5
B)x < 10,y > 5
C)x < 9,y < 6
D)x < 11,y > 8

Question 72

Table 11.5
Paul's Pretzels manufactures and distributes gourmet pretzels for limited retail sales.Paul has determined the "demand points" and their relative locations as follows:
Use the information in Table 11.5.If Paul desires to locate a manufacturing facility at the center of gravity,what would be the x and y coordinates of the facility?

A)x < 14,y < 14
B)x < 14,y > 14
C)x < 15,y < 14
D)x < 15,y > 15

Question 73

Table 11.7
Nuts-and-Bolts,Inc.wishes to find the best location for a plant that will satisfy customer demand in the following five areas.

Use the information in Table 11.7.What are the x and y coordinates for the center of gravity?

A)x > 9,y > 14
B)x < 4,y > 2
C)x > 4.5,y < 2
D)x < 9,y < 6

Question 74

Table 11.5
Paul's Pretzels manufactures and distributes gourmet pretzels for limited retail sales.Paul has determined the "demand points" and their relative locations as follows:
Use the information in Table 11.5.If a facility were to be located at (15,15),what would be the load-distance score? (Assume rectilinear distance. )

A)less than or equal to 5000
B)more than 5000 but less than or equal to 5200
C)more than 5200 but less than or equal to 5400
D)more than 5400

Question 75

Table 11.6
Union Fork,Inc.has five distribution centers located at the location coordinates given as follows.The demand at each center is also given.

Use the information in Table 11.6.What is the total load-distance score for the two plants if Plant 1 is located at the center of gravity serving distribution centers A,B,and C,and Plant 2 is located at the center of gravity serving D and E? (Assume rectilinear distance. )

A)less than or equal to 300
B)more than 300 but less than or equal to 350
C)more than 350 but less than or equal to 400
D)more than 400

Question 76

Table 11.6
Union Fork,Inc.has five distribution centers located at the location coordinates given as follows.The demand at each center is also given.

Use the information in Table 11.6.What is the total load-distance score for the two plants if Plant 1 is located at the center of gravity serving A,B,and C,and Plant 2 is at the center of gravity serving D and E? (Assume Euclidean,or straight line,distance. )

A)less than or equal to 240
B)more than 240 but less than or equal to 260
C)more than 260 but less than or equal to 280
D)more than 280

Question 77

Table 11.6
Union Fork,Inc.has five distribution centers located at the location coordinates given as follows.The demand at each center is also given.

Use the information in Table 11.6.Assume that two plants,rather than one,are to be locate.Plant 1 serves distribution centers A,B,and C.Plant 2 serves distribution centers D and E.What is the center of gravity for plant 1?

A)x > 4,y > 7
B)x > 4,y < 7
C)x < 4,y > 7
D)x < 4,y < 7

Question 78

Consider the location of four distribution centers,A,B,C,and D,with the following location coordinates and shipping requirements per week. Management is considering locating a new plant at the site of one of the four distribution centers.What is the load-distance score if the plant is located at distribution center A? (Use rectilinear distance. )

A)less than or equal to 4500
B)greater than 4500 but less than or equal to 5000
C)greater than 5000 but less than or equal to 5500
D)greater than 5500

Question 79

Kiddie Clothes wishes to locate its warehouse so that it would serve its four different stores,described as follows.Based on the center of gravity,what are the x and y coordinates of the proposed warehouse location?

A)x is less than or equal to 3;y is less than or equal to 2.
B)x is less than or equal to 3;y is less than or equal to 2.5.
C)x is greater than or equal to 2.5;y is greater than or equal to 3.
D)x is less than or equal to 2.5;y is greater than or equal to 2.9.

Question 80

A grower and shipper of fresh gourmet herbs has determined the following demand forecast for the five metropolitan markets that the firm serves.Based on your calculations of the center of gravity,where should the new herb farm be located?

A)x > 6,y > 8
B)x < 5,y > 5
C)x < 7,y > 6
D)x < 6,y >6