Deck 9: Location and Layout

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This clustering of competing firms can create an industrial ecosystem whereby facilities exchange or transfer wastes,recycle materials,and use each other's byproducts.

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The transportation method is a quantitative approach that can help solve multiple-facility location problems.

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

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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.

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Euclidean distance is the distance between two points with a series of 90 degree turns.

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Location is one of the factors in determining how conveniently customers can carry on business with a firm.

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Facility location is the process of determining a geographic site for a firm's operations.

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A qualitative factor is one that can be evaluated in dollar terms,such as community attitudes or quality of life.

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The load-distance method is a qualitative model used to evaluate locations.

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Layout planning involves decisions about the physical arrangement of economic activity centers within a facility.

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Location factors can be divided into dominant and secondary factors.

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One dominant factor in locating service facilities is customer proximity.

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

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Break-even analysis can help a manager compare location alternatives on the basis of qualitative factors.

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Critical mass refers to several competing firms clustering in one location to attract customers.

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An economic activity center is anything that consumes space.

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One dominant factor in locating manufacturing facilities is a proximity to markets.

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Secondary location factors are derived from competitive priorities.

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The absolute location is the placement of the center relative to other centers.

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One of the advantages of building a new plant or moving to a new retail or office space is that the firm does not have to rely on production from a single plant.

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The balance delay is the amount by which efficiency falls short of 100 percent.

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One common performance criteria for layouts is capital investment.

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One common performance criteria for layouts is materials handling.

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Layout flexibility means either that the facility remains desirable after significant changes occur or that it can be easily and inexpensively adapted in response to changes.

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A product layout is best for low-volume,high-variety production.

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Relative to product layouts,an advantage of process layouts is that production planning and control is generally less difficult.

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In the fixed-position layout,the product is fixed in place,and the workers,tools,and equipment come to the product.

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Relative to product layouts,process layouts are less vulnerable to changes in product mix or new marketing strategies and are therefore more flexible.

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When volumes are high,an advantage of product layouts over process layouts is that less unproductive time is lost to changeovers and materials handling.

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Many projects use a fixed-position layout.

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Immediate predecessors are the smallest units of work that can be performed independently.

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The space in a bank where customers line up for teller service is not an economic activity centre.

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A trip matrix is a plan that allocates space and indicates placement of each department.

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A product layout generally has slower processing rates than a process layout.

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A process layout is a layout in which workstations or departments are arranged in a linear path.

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A product layout groups workstations according to function rather than arranging workstations in a linear path.

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Paced lines require that inventory storage areas be placed between stations.

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Line balancing is the assignment of work to stations in a line so as to achieve the desired output rate with the smallest number of workstations.

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A cell is two or more dissimilar workstations located close together through which a limited number of parts or models are processed with line flows.

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A REL chart reflects the qualitative judgments of managers and employees.

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Locating work centres in a facility primarily depends on the absolute location within the facility; the location of work centre relative to other work centres is not a key consideration.

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When volumes are high,an advantage of flexible-flow layouts over line-flow layouts is faster processing rates.

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Proximity to customers is a more important factor in locating manufacturing facilities then it is for locating service facilities.

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Which of the following statements on locating new U.S.manufacturing plants is best?

A) A favorable labor climate is the most important factor for capital-intensive plants.
B) Labor climate is a function of wage rates, training requirements, attitudes toward work, worker productivity, and union strength.
C) Locating near markets is less important when the finished goods are bulky or heavy and outbound transportation rates are high.
D) The shift in new industrial jobs to non-urban regions, which is experienced in the United States, is not taking place in Japan and Europe.

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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

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The group of location factors found to be most important for new manufacturing plants,on the average,is

A) proximity to markets.
B) quality of life.
C) proximity to suppliers and resources.
D) favorable labor climate.

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A line-flow layout is an arrangement where the product is fixed in place,while workers,along with their tools and equipment,come to the product to work on it.

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When volumes are high,an advantage of line-flow layouts over flexible-flow layouts is that less unproductive time is lost to changeovers and material handling.

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A preference matrix combines qualitative factors and quantitative scores to compare several sites being considered in a location decision.

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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).
Factor Evaluation by Location
$\begin{array} { | l | c | c | c | c | c | c | } \hline \text { Factor } & \text { Weight } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Labor Climate } & 35 & \text { Exc. } & \text { Poor } & \text { Poor } & \text { Very Gd.} & { \text { Poor } } \\\text { Proximity to Markets } & 25 & \text { Good } & \text { Good } & \text { Poor } & \text { Exc. } & \text { Exc. } \\\text { Quality of Life } & 15 & \text { Poor } & \text { Good } & \text { Fair } & \text { Poor } & \text { Exc. } \\\text { Qroximity to Suppliers } & 15 & \text { Fair } & \text { Exc. } & \text { Good } & \text {Very Gd } & \text { Good } \\\text { Taxes } & 10 & \text { Very Gd} & \text { Fair } & \text { Very Gd } & \text {Poor } & \text { Good } \\\hline\end{array}$

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

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Which one of the following statements about distance measures is best?

A) Euclidean distance is the straight-line distance.
B) The rectilinear distance between two locations can never exceed the Euclidean distance.
C) Euclidean distance equals the actual travel distance.
D) Euclidean distance assumes that the trip between two points is made with a series of 90-degree turns.

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Which of the following group of 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 competitor's facilities
D) favorable labor climate

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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

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One disadvantage of flexible-flow layout is that production planning and control is more difficult.

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An advantage of flexible-flow layouts over line-flow layouts is that the process is less vulnerable to changes in product mix.

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In order to attract the maximum number of customers,competing service businesses rarely locate close to each other.

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A layout that groups workstations or departments according to function is referred to as a flexible-flow layout.

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Which of the following statements on 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.

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Which one of the following statements about distance measures is best?

A) Rectilinear distance is the straight-line distance.
B) The Euclidean distance between two locations can never exceed the rectilinear distance.
C) Euclidean distance assumes that the trip between two points is made with a series of 90-degree turns.
D) Rectilinear distance always equals the actual travel distance.

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A mixed-model line produces several items belonging to the same family.

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The rectilinear distance between points A (15,25)and B (45,5)is

A) less than or equal to 35.
B) more than 35 but less than or equal to 40.
C) more than 40 but less than or equal to 45.
D) more than 45.

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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
Factor Score Evaluation by Location
$\begin{array} { | l | c | c | c | c | c | } \hline \text { Factor } & \text { Weight } & \text { A } & \text { B } & \text { C } & \text { D } \\\hline \text { Market } & 30 & 5 & 4 & 4 & 4 \\\text { Labor Climate } & 25 & 2 & 5 & 4 & 3 \\\text { Suppliers } & 25 & 3 & 4 & 3 & 5 \\\text { Quality of Life } & 20 & 2 & 3 & 5 & 2 \\\hline\end{array}$

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

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McKenna Restaurant wishes to open a new store.Based on the following subjective criteria,where should the new store be located?
Factor Score by Location
$\begin{array} { | l | c | c | c | c | c | } \hline \text { Factor } & \text { Weight } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } \\\hline \text { Markets } & 35 & 8 & 10 & 6 & 8 \\\text { Quality of Life } & 25 & 6 & 4 & 8 & 6 \\\text { Transportation } & 20 & 4 & 6 & 8 & 4 \\\text { Suppliers } & 20 & 8 & 6 & 8 & 6 \\\hline\end{array}$

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

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Table 9.1
A single facility is needed to meet the demands of four markets.
The locations and demands of these four markets are shown below.
$\begin{array} { | c | c | c | } \hline \text { Market } & \text { Coordinates } & \text { Demand } \\\hline \mathrm { A } & ( 8,6 ) & 10 \\\mathrm {~B} & ( 4,12 ) & 15 \\\mathrm { C } & ( 3,2 ) & 10 \\\mathrm { D } & ( 9,6 ) & 6 \\\hline\end{array}$

-Use the information from Table 9.1.If the facility must be located at one of these four markets,which of the four locations is most desirable,assuming rectilinear distance?

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

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Table 9.3
A firm has the following demand forecasts for the five markets that it serves:
$\begin{array} { | c | c | c | } \hline \text { Market } & \text { Coordinates } & \begin{array} { c } \text { Demand } \\\text { Forecast }\end{array} \\\hline \mathrm { A } & ( 3,1 ) & 10 \\\mathrm {~B} & ( 12,9 ) & 12 \\\mathrm { C } & ( 9,14 ) & 9 \\\mathrm { D } & ( 8,8 ) & 4 \\\mathrm { E } & ( 2,10 ) & 15 \\\hline\end{array}$

-Use the information in Table 9.3.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

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Table 9.1
A single facility is needed to meet the demands of four markets.
The locations and demands of these four markets are shown below.
$\begin{array} { | c | c | c | } \hline \text { Market } & \text { Coordinates } & \text { Demand } \\\hline \mathrm { A } & ( 8,6 ) & 10 \\\mathrm {~B} & ( 4,12 ) & 15 \\\mathrm { C } & ( 3,2 ) & 10 \\\mathrm { D } & ( 9,6 ) & 6 \\\hline\end{array}$

-Use the information from Table 9.1.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

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A) less than or equal to 1300
B) more than 1300 but less than or equal to 1400
C) more than 1400 but less than or equal to 1500
D) more than 1500

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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

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Table 9.2
Durham Toy, Inc. has five distribution centers at the location coordinates
given as follows. The monthly demand at each center is also given.
$\begin{array} { | c | c | c | } \hline \mathrm { DC } & \text { Coordinates } & \text { Demand } \\\hline \mathrm { A } & ( 10,12 ) & 40 \\\mathrm {~B} & ( 25,30 ) & 25 \\\mathrm { C } & ( 8,15 ) & 30 \\\mathrm { D } & ( 11,20 ) & 10 \\\mathrm { E } & ( 25,6 ) & 20 \\\hline\end{array}$

-Pinkerton Company has four distribution centers located at the location coordinates given below.
$\begin{array} { | c | c | c | } \hline \text { DC } & \begin{array} { c } \text { Coordinates } \\\text { (Miles) }\end{array} & \text { Demand } \\\hline \mathrm { A } & ( 100,150 ) & 50 \\\mathrm {~B} & ( 250,250 ) & 30 \\\mathrm { C } & ( 150,150 ) & 15 \\\mathrm { D } & ( 200,300 ) & 100 \\\hline\end{array}$
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

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Table 9.2
Durham Toy, Inc. has five distribution centers at the location coordinates
given as follows. The monthly demand at each center is also given.
$\begin{array} { | c | c | c | } \hline \mathrm { DC } & \text { Coordinates } & \text { Demand } \\\hline \mathrm { A } & ( 10,12 ) & 40 \\\mathrm {~B} & ( 25,30 ) & 25 \\\mathrm { C } & ( 8,15 ) & 30 \\\mathrm { D } & ( 11,20 ) & 10 \\\mathrm { E } & ( 25,6 ) & 20 \\\hline\end{array}$

-Consider the location of four distribution centers,A,B,C,and D,with the following location coordinates and shipping requirements per week.
$\begin{array} { | c | c | c | } \hline \text { Location } & \text { Coordinates } & \text { Tons } \\\hline \mathrm { A } & ( 0,100 ) & 2 \\\mathrm {~B} & ( 200,300 ) & 1 \\\mathrm { C } & ( 500,600 ) & 3 \\\mathrm { D } & ( 100,200 ) & 4 \\\hline\end{array}$
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

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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

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

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A company 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.
Factor Score Evaluation by Location
$\begin{array} { | l | c | c | c | c | c | } \hline \text { Criterion } & \text { Weight } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } \\\hline \text { Wages } & 40 & 4 & 5 & 3 & 7 \\\text { State Govt. } & 30 & 8 & 5 & 7 & 5 \\\text { Policies } & 20 & 3 & 4 & 3 & 2 \\\text { Unionism } & 10 & 7 & 3 & 6 & 4 \\\text { Weather } & & & & & \\\hline\end{array}$
Based on weighted scores,where should the company locate its new facilities?

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

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Table 9.4
Table 7.4 A company has determined the "demand points" and their relative locations as follows:
Coordinates
$\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Demand } \\\text { Point }\end{array} & \mathrm { x } & \mathrm { y } & \text { Demand } \\\hline \mathrm { A } & 10 & 10 & 100 \\\mathrm {~B} & 10 & 20 & 200 \\\mathrm { C } & 15 & 10 & 150 \\\mathrm { D } & 20 & 10 & 200 \\\hline\end{array}$

-Using the information in Table 9.4.If a company 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

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.
Factor Evaluation by Location
$\begin{array} { | l | c | c | c | c | c | } \text { Location Factor } & \text { Weight } & \text { A } & \text { B } & \text { C } & \text { D } \\\hline \text { Labor Climate } & 35 & \text { Exc. } & \text { Very Gd. } & \text { Very Gd. } & \text { Exc. } \\\text { Quality of Life } & 25 & \text { Fair } & \text { Good } & \text { Very Gd. } & \text { Poor } \\\text { Transportation } & 15 & \text { Good } & \text { Very Gd. } & \text { Good } & \text { Fair } \\\text { Markets } & 10 & \text { Exc. } & \text { Good } & \text { Very Gd. } & \text { Very Gd. } \\\text { Taxes } & 10 & \text { Fair } & \text { Exc. } & \text { Exc. } & \text { Very Gd. } \\\text { Utilities } & 10 & \text { Exc. } & \text { Very Gd. } & \text { Good } & \text { Good } \\\hline\end{array}$
Calculate the weighted score for each alternative.Which location would you recommend?

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

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Sweet Candy,Inc.wishes to open two new stores.Based on the following subjective criteria,where should the new stores be located?
Factor Score Evaluation by Location
$\begin{array} { | l | c | c | c | c | c | c | } \text { Factor } & \text { Weight } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Markets } & 35 & 4 & 3 & 5 & 4 & 5 \\\text { Transportation } & 25 & 3 & 5 & 3 & 3 & 2 \\\text { Labor Climate } & 20 & 5 & 5 & 2 & 3 & 5 \\\text { Taxes } & 15 & 2 & 4 & 4 & 5 & 2 \\\text { Quality of Life } & 5 & 3 & 4 & 5 & 4 & 5 \\\hline\end{array}$

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

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

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

Question

Table 9.2
Durham Toy, Inc. has five distribution centers at the location coordinates
given as follows. The monthly demand at each center is also given.
$\begin{array} { | c | c | c | } \hline \mathrm { DC } & \text { Coordinates } & \text { Demand } \\\hline \mathrm { A } & ( 10,12 ) & 40 \\\mathrm {~B} & ( 25,30 ) & 25 \\\mathrm { C } & ( 8,15 ) & 30 \\\mathrm { D } & ( 11,20 ) & 10 \\\mathrm { E } & ( 25,6 ) & 20 \\\hline\end{array}$

-A single facility is needed to meet the demand of four regions depicted as follows:
$\begin{array} { | c | c | c | } \hline \text { Region Center } & \text { Coordinates } & \text { Demand } \\\hline \text { A } & ( 2,10 ) & 20 \\\text { B } & ( 7,10 ) & 5 \\\text { C } & ( 2,2 ) & 10 \\\text { D } & ( 7,4 ) & 10 \\\hline\end{array}$
If the plant is located at A,what is the total load-distance score,assuming Euclidean distance?

A) less than or equal to 1000
B) more than 1000 but less than or equal to 1100
C) more than 1100 but less than or equal to 1200
D) more than 1200

Question

The Euclidean distance between points A (15,25)and B (45,5)is

A) less than or equal to 35.
B) more than 35 but less than or equal to 40.
C) more than 40 but less than or equal to 45.
D) more than 45.

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Deck 9: Location and Layout

This clustering of competing firms can create an industrial ecosystem whereby facilities exchange or transfer wastes,recycle materials,and use each other's byproducts.

False

The transportation method is a quantitative approach that can help solve multiple-facility location problems.

True

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

True

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.

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